The former president of the Central Bank, Roberto Campos Neto, announced this Monday that the Brazilian monetary authority plans to reduce the basic interest rate to the level of 8.5% per year by the end of President Luiz Inácio Lula da Silva's term, in 2026. The declaration was made during an interview on the Roda Viva program, on TV Cultura. Campos Neto recalled that the current interest rate cut cycle began in August 2023 and that the downward trajectory has been consistent, with the objective of stimulating the national economy.
The BC president defended that monetary policy must be conducted in a technical and independent manner, without political interference. According to him, the Central Bank's autonomy is fundamental for the credibility of economic policy and for inflation control in the country. Campos Neto emphasized that the institution works with projections based on objective data and that decisions are made considering the global and domestic macroeconomic scenario.
During the interview, Campos Neto also commented on fiscal risk and the sustainability of Brazilian public debt. He acknowledged that indebtedness is a concern, but stated that the fiscal framework approved by the government offers a safe path for the stabilization of public accounts. The president of the BC warned, however, that vigilance is necessary to avoid imbalances that could compromise investor confidence.
The interview also addressed international issues, including the impact of United States monetary policies on the Brazilian economy. Campos Neto explained that the Federal Reserve (Fed) still maintains elevated interest rates, which creates challenges for emerging countries like Brazil, but highlighted that the Brazilian BC is prepared to deal with eventual currency volatility. He added that the diversification of international reserves is one of the tools used to protect the economy from external shocks.
