Wednesday, March 29, 2023
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Podcast: the reasons for the arm wrestling between Lula and the Central Bank


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President Lula’s (PT) criticism of the Central Bank has escalated in recent days. In a speech this Monday (6), the PT classified the current Selic level as shameful, maintained at 13.75% at last week’s Copom meeting, the Central Bank’s Monetary Policy Committee.

In a provocative tone, Lula also urged businessmen to join the offensive against the high level of the basic interest rate. “You need to learn to complain, because when the Central Bank depended on me, everyone complained”, he protested.

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It is the first time that Lula deals with an autonomous BC, which was guaranteed by law in 2021, with a four-year term for the president and the bank’s board. The exchange of barbs with the current president of the institution, Roberto Campos Neto, has political contours. Campos Neto was nominated by Jair Bolsonaro and is close to allies of the former president.

So far, the politicization of the issue has contributed to reinforce the market’s skepticism towards Lula, which has worsened inflation expectations and pressured interest rates.

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This Tuesday’s Café da Manhã (7) explains what is behind the decisions on the basic interest rate and discusses what the Central Bank’s autonomy means in the current context. The economics editor of SheetAna Estela de Sousa Pinto, also analyzes the impacts of this clash on the government’s promises.

The audio program is published on Spotify, streaming service partner of Sheet in the initiative and which specializes in music, podcast and video. You can listen to the episode by clicking above. To access the application, just register for free.

Breakfast is published from Monday to Friday, always at the beginning of the day. The episode is presented by journalists Gustavo Simon and Gabriela Mayer, with production by Carolina Moraes, Laila Mouallem and Victor Lacombe. Sound editing is by Thomé Granemann.

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