Haddad says that the increase in the Selic rate is the fault of Campos Neto, who left the Central Bank 6 months ago

Finance Minister Fernando Haddad once again blamed Roberto Campos Neto, former president of the Central Bank (BC), for the increase in the basic interest rate (Selic). Last week, the Monetary Policy Committee (Copom) increased it to 15% per year, the highest in almost 20 years.

In an interview with TV Record News on Tuesday (24), Haddad said that the increase in the Selic rate was "contracted" during Campos Neto's administration and suggested that the increase was predefined even before Galípolo took office.

Although Copom signaled, in its last meeting under Campos Neto, in December, that it would make two more one percentage point increases in interest rates at the beginning of 2025, the board has since promoted two other hikes, which totaled 0.75 percentage points. All meetings since January have been led by Gabriel Galípolo, the president of the Central Bank appointed by President Luiz Inácio Lula da Silva.

According to him, the current level of the Selic rate is worrying. He considers this figure to be excessively restrictive and well above projected inflation. In the interview, Haddad did not hesitate to spare the current president of the Central Bank (BC), Gabriel Galípolo.

Campos Neto, nominated by former President Jair Bolsonaro, has always been the target of criticism from the current government. Galípolo took over as president of the Central Bank in January of this year, nominated by President Luiz Inácio Lula da Silva.

Haddad says BC should avoid "u-turn" with high interest rates

The Ministry of Finance points out that the Central Bank must act cautiously and avoid “monetary policy U-turns” so as not to compromise its credibility. Haddad emphasizes the importance of maintaining coherence in economic decisions.

At the same time that the ministry criticizes the interest rate, the government claims to be committed to developing new real estate credit instruments, especially for the middle class, with the aim of boosting the construction industry, seen as crucial for the country's development.

Concerns about the restrictive Selic rate persist, even in the face of positive economic indicators such as the unemployment rate being at its lowest historical levels – in April it was 6.6%, the lowest level for the month since 2012 – and vigorous GDP growth – in the first quarter it was 1.4% and in twelve months it was 3.5%.

Haddad argues that, for Brazil to enter a virtuous cycle of lasting growth, it is imperative that the country be more parsimonious and prudent in public spending, but also that monetary policy contribute to a more favorable and predictable economic environment.