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Campos Neto calls for coordination between spending and monetary policy; Alckmin guarantees fiscal responsibility

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President of the Central Bank (BC) and vice president-elect attended an event on the coast of São Paulo and spoke about the fiscal scenario (Image: REUTERS/Adriano Machado)

The president of central bank (BC), Roberto Campos Netosaid today that there is a need for coordination between monetary and fiscal policies so that the Brazil do not enter a “collision course”, once again warning that the conduct of public accounts has an effect on the decisions of the autarchy.

At the Esfera Forum, organized in Guarujá, on the coast of Sao PauloCampos Neto shared the stage with the elected vice president Geraldo Alckminwhich reinforced the commitment of the government of Luiz Inácio Lula da Silva with fiscal responsibility.

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“You don’t want to be, on the one hand, raising interest rates, and, on the other, the fiscal being expansive, because in the end you enter a collision course”, said the president of the BC In the event. “We need to understand that we had a very high global expense, that there is a very high debt to be paid in all countries, in Brazil as well. This has an effect on what the Central Bank does,” he added.

concern about interest

Your comments came after the future interest skyrocketed in recent weeks amid the perception of high fiscal risk in the face of the elected government’s attempt to make extensive extra-ceiling spending possible starting next year, with the DI curve reaching the price of new increases in the Seliccurrently at 13.75%, in 2023.

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“What we need to understand is that interest is not a cause, it is a consequence, it is a consequence of a job well done. Obviously, no central banker wants high interest rates, we want low interest rates”, said Campos Neto.

At the event, the BC president also warned of the risks of inflationin the midst of growing expectations in the financial market that price pressures may regain momentum starting next year under the fiscal easing intended by the elected government.

“Inflation is a social element as well. Those who have more resources protect themselves from inflation, those who have less do not… It makes long-term planning for companies and people very difficult, which in the end means less growth and less employment”, said the representative of the monetary authority.

Alckmin guarantees fiscal responsibility

Alckmin, coordinator of the transition to the Lula government, sought to reinforce the discourse that the country’s next administration will adopt fiscal responsibilityciting the president-elect’s good record in the conduct of public finances during his previous terms.

“As I know there is a fiscal concern, I would like to say that whoever bets on fiscal irresponsibility will be disappointed and whoever bets on fiscal irresponsibility will make mistakes”, said the vice-president-elect, who also defended the need to balance moderation by spend on social demands.

Alckmin said at the event that there is no structural reform of previous governments to be undone, and, when asked about who will be the minister of Farm from Lula, he declined the conversation. “Everything comes in its time, let’s wait a little bit.”

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Source: Moneytimes

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