Lula-Central Bank Fight Intensifies as Traders Eye Rate Hike
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Lula tried to walk back prior comments on Monday, saying his criticism was not about whether or not the central bank was independent, but rather over the fact that the institution continues to keep borrowing costs high.
In Brazil, “the problem is that there is a culture of living with high interest rates and that doesn’t mix well with necessities and investment.” Lula said.
The president had publicly questioned the central bank in both January and earlier this month. Current Selic levels make it “impossible” to boost growth, Lula said previously, adding that he considered the bank’s autonomy law to be “nonsense” and suggesting a higher, 4.5% inflation goal.