Unchanged benchmark interest irrational, Lula says in Italy

Brazilian President Luiz Inácio Lula da Silva described as irrational the decision made by the Central Bank’s Monetary Policy Committee to maintain the country’s benchmark interest rate, the Selic, at 13.75 percent. “What’s happening in Brazil is irrational, you have a rate of 13.75 percent with the inflation at five percent.”

During a press conference in Rome on Thursday (Jun. 22), Lula once again criticized Central Bank President Roberto Campos Neto.

“It’s not a quarrel between the government and the Central Bank. It’s the Brazilian society that’s up against the Central Bank,” he argued, citing the National Confederation of Industries, retailers, and small and medium producers.

Before leaving for France, President Lula also said that Campos Neto is playing against the Brazilian economy.

“There is no acceptable explanation as to why the interest rate is 13.75 percent. We don’t have demand inflation,” he said.

“I honestly think that this citizen is playing against the interests of the Brazilian economy,” the president concluded.