Brazilian trade unions protest against high interest
Brazilian trade unions staged a demonstration outside the Central Bank building on Paulista avenue, in downtown São Paulo, on Tuesday (Jun. 20), demanding a reduction in the country’s basic interest rate. The protesters carried flags and had a boom car on the sidewalk. A cordon of military police officers prevented the demonstrators from approaching the entrance to the premises.
According to the general secretary of union center Força Sindical, João Carlos Gonçalves, the bench mark interest rate stands at 13.75 percent a year, reducing the supply of jobs as it makes incentives in the financial market more appealing than in production.
“Workers are harmed in two ways, in my opinion: in employment, because, with high interest, there’s no investment in production, so he goes jobless. With high interest rates, he can’t buy,” he argued, adding that more expensive credit also brings down people’s purchasing power.
In his view, a balance must be struck between keeping up economic activity and curbing inflation. “If you’re too strict with the inflation, you also end up bringing the country into recession, so experts must understand the moment we’re going through,” he went on to say.
The Central Bank’s Monetary Policy Committee met in Brasília on Tuesday (20) for the fourth meeting of the year to define the Selic rate. No cuts in the rate are expected, as per the minutes from the last meeting, in May. Their decision will be unveiled later on this Wednesday (21).
