High Interest Rates Not Hurting Brazil, Says Lula

Brazilian President Luiz Inácio Lula da Silva affirmed today that the hike in the annualized benchmark interest rate (Selic) is not hurting the country’s economic growth.

According to the President, one of the reasons for this growth is the creation of new lines of credit for the population.

“That is why supermarket sales are high, because people have access to money they didn’t have before,” Lula pointed out at the launching, in Brasí­lia, of the special edition of the Best Coffees of Brazil.

Last week the Monetary Policy Committee raised the Selic to 19.5%, the eight consecutive hike of the benchmark interest rate.

Lula recalled that consigned credit alone has injected US$ 5.3 billion (13.5 billion reais) into the economy. This represents 40% of domestic consumption.

He also remarked that, while the previous administration made US$ 13 million (33 million reais) available annually through lines of microcredit, the present Administration is providing US$ 236.5 million (R$ 600 million).

“The pure, stark truth is that the amount of money that is being injected into the market was not anticipated in the handbooks of economics,” he said.




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