Brazil Will Stay the Course, High Interest Rates and All

Brazil’s Finance Minister Antonio Palocci said Friday in London there’s no chance that the current administration of President Lula da Silva will abandon the current tight fiscal and monetary policies in spite of internal political disputes.

"There is no possibility for the fiscal commitments to be relaxed because of internal political disputes," emphasized Palocci, who is currently in London participating of a G8 Finance ministers meeting.

President Lula da Silva is facing a serious political situation following claims of corruption involving members of the ruling Workers Party, some of which were sacked, but nevertheless it has had an impact in financial markets.

Further claims of "vote buying" in Congress to ensure the passing of crucial legislation is still pending and several members from the ruling coalition have been pinpointed as involved.

The impact of the situation has reached the Brazilian Central Bank forcing President Lula da Silva’s office to support banker Henrique Meirelles one of the most resisted figures of the bank for his insistence in an extremely high interest rates policy to cut back inflation threats.

"The president of the Central Bank, Henrique Meirelles will remain in his post which he has been performing with competence and public dedication", said a short official release adding that press reports indicating a possible replacement are entirely "groundless".

Mr. Meirelles is currently under investigation by the Brazilian Supreme Court for alleged fiscal irregularities and a possible electoral offense.

A former Bank of Boston CEO he’s considered the symbol of the orthodox economic policies enforced by the Lula da Silva administration, particularly the current 19,75% basic interest rate when annual inflation is in the range of 8,5%.

Mr. Meirelles is under investigation for alleged tax evasion in January 2003 before been named to the Central Bank and for having given the wrong home address when he was a candidate to the Lower House in the 2002 elections.

The influential O Estado de S. Paulo published Friday that Mr. Meirelles would be replaced as Central Bank president by Murilo Portugal, Deputy Finance minister.

This article appeared originally in Mercopress – www.mercopress.com.

Tags:

  • Show Comments (0)

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Ads

You May Also Like

Ex-Secretary Says Death Threats Kept Her Quiet in Brazil’s Kickback Scandal

In her testimony before the Post Office Parliamentary Inquiry Committee (CPI dos Correios), the ...

RAPIDINHAS

Why insist on playing with fire, which is precisely what this government and its ...

Businessmen Excited About Brazí­l’s Arab Summit

Commercial opportunities seem to be one of the main attractions for delegations arriving in ...

Iraq to Import 250 Trucks from Brazil. Cars Will Follow

Iraq is negotiating the purchase of 250 trucks from the Mercedes-Benz plant in São ...

Tramontina, a Brazilian Company, Revives Cookware Making and a Town in the US

In April 2003, when a major cookware manufacturing facility closed in Manitowoc, Wisconsin, USA, ...

Brazil & Neighbors Still Working on Military Alliance Free from US

Unasur, the Union of Latin American Nations, meeting in Brazil this week agreed to ...

After Lula’s Tour, Brazil Sends Trade Mission to Africa

Brazil is organizing a trade mission to visit various African countries. According to the ...

Norway Firm to Help Bridge Digital Gap in Brazil

Norway-based Nera, a global provider of wireless and satellite communications solutions, has been selected ...

The US Is Butchering the Election in Haiti and Brazil Is Its Accomplice

U.N. political representation in Haiti and the Brazil-led peacekeeping force have failed in their ...

Green Fuel Is Good. Brazil Wants You Too to Be a Believer

Brazil will be hosting representatives from 190 countries, including several world leaders for the ...