Brazil’s New Key Interest Rate Shows Central Bank’s Arrogance, Says Industry Federation

In a note on the decision by the Monetary Policy Committee (COPOM) of Brazil’s Central Bank to lower the annualized benchmark interest rate (Selic) by 0.75% to 16.5%, the president of the Federation of Industries of the State of São Paulo (FIESP), Paulo Skaf, complained that "once again the COPOM has high-mindedly reasserted its absolute independence." The 16.5% rate will remain in effect for the next 45 days.

In the note, Skaf claims the decision shows that the Central Bank "does not care about the moderate pace of inflation; is unconcerned about Brazil’s ridiculous current growth rate; does not share the ideas of the majority of economists; and dismisses the critical arguments presented by the productive sector."

The FIESP president goes on to question whether this attitude "represents autonomy or arrogance."

The Federation of Industries of Rio de Janeiro (FIRJAN) also issued a note, stating that "it is essential for the drop in interest rates to be accompanied by measures that permit the expansion of productive investment in the country, an indispensable prerequisite if there is to be long-term development."

The Copom has reduced Brazil’s basic interest rate, the Selic, by 0.75 percentage points, lowering it from 17.25% to 16.50% per year. Copom has been steadily and gradually reducing the Selic since September of last year. Since then the rate has fallen 3.25 percentage points.

A note from Copom says the decision was by a 6 to 3 vote, with the three other votes in favor of a bigger reduction of one percentage point.

ABr

Tags:

You May Also Like

In Bed With a Brazilian

Brazilians spend an average of 30 minutes doing it. By comparison, Thais don’t spend ...

The Robbery

This is not just to please. You are a victim of the system. I ...

Brazil’s Petrobras Investing US$ 55 Billion in 2008

Almir Barbassa. the Financial director of state-controlled Brazilian oil multinational Petrobras, informed that investment ...

The uniquely Brazilian musical genre known as choro is the big star of new label Acari Records.

The Brazilian Internet explosion was so fast that in only five years the Brazilians ...

People on the Streets and Authorities Lambast Brazil’s Impunity

Members of the Brazilian Congress, representatives of the private sector and the Brazilian Bar ...

Brazil Exports US$ 39 Million in Honey, a 112% Boost. US Buys 64%

Honey export from Brazil have recorded positive results in the first half this year. ...

WTO Ministers in Brazil Agree to Talk. But They Don’t Know When

World Trade ministers meeting in Brazil have agreed that talks on a global pact ...

Unable to Keep Up with Demand Brazil Sharply Ups Fuel Imports Including Ethanol

Brazilian oil production has failed to keep up with rising consumption, and the country ...

Greepeacers Protest Brazil’s Nukes and Go to Jail

As a form of protest, 11 Greenpeace activists sealed the doors today at the ...

Brazil’s Cheap Cost of Living Is a Myth, World Bank Study Shows

A World Bank comparative study on prices and purchasing power has found that Brazil ...