Autonomous Central Bank is a world brand and was chosen by Congress, says Lira

The president of the Chamber, deputy Arthur Lira (PP-AL), said this Thursday (9) that the autonomy of the Central Bank is a “world mark” and that Brazil cannot go back on this legislation to expand the government’s influence over the monetary authority.

“The independent Central Bank is a world brand, Brazil needs to be inserted in this context […] I think that, technically, the independent Central Bank was the model chosen by the National Congress and that it is unlikely to retroact”, said Lira to journalists after participating in an agricultural fair in Cascavel (PR).

Lira also said that, from what he has heard from parliamentarians, the “trend” of the House is that a possible proposal to interfere in the independence of the Central Bank would be rejected in Congress.

The statement by the president of the Chamber was given in the midst of the frying that the government Luiz Inácio Lula da Silva (PT) has done to the president of the Central Bank, Roberto Campos Neto.

The main complaint of Lula and his economic team has been the monetary authority’s decision to maintain the basic interest rate (Selic) at 13.75%.

The president went so far as to state that the current Selic level is a “shame”, classified the BC’s autonomy as “nonsense” and gave signs that he may review the institution’s independence after the end of Campos Neto’s mandate, in December 2024 .

On the other hand, the Central Bank has demonstrated that it should keep interest rates at the current level for a longer period of time. At the last Copom (Monetary Policy Council) meeting, the first in the Lula administration, the institution issued warnings about fiscal uncertainties and the worsening of inflation expectations, which are moving away from the target in longer terms.

Lira also stated that Congress will analyze Lula’s provisional measure that transferred the Coaf (Financial Activities Control Council) from the Central Bank to the Ministry of Finance.

According to the president, the Chamber was against the move of Coaf to the Ministry of Justice, during the Jair Bolsonaro (PL) government, because the body should not persecute people and, yes, act as “an excellent soccer referee”. “A good soccer referee doesn’t have his mother cursed, he goes unnoticed. That’s how COAF has to be. It’s a technical body that has to go after irregular operations”, he said.

Lira stated that the transfer of Coaf should not be the “most controversial topic”. “According to the conversations given to me by Roberto Campos [Neto]there was an agreement that he [Coaf] you could go back to the Ministry of Economy”.

For the president of the Chamber, the most delicate subject will be the casting vote of the Carf (Administrative Council of Tax Appeals).

At the beginning of his term, Lula edited a provisional measure to reinstate the casting vote in the court, responsible for judging tax disputes between taxpayers and the Federal Revenue Service.

The device guarantees the Union the tie-breaking power in decisions, but was overthrown in 2020, during the Bolsonaro government, imposing billionaire losses on public coffers.

“The most controversial topic should be the discussion of the composition of the casting vote for Carf. This discussion should be further discussed by the National Congress”, Lira limited himself to saying.