Finance Minister Fernando Addad said central bank governor Gabriel Garipolo is doing a good job as head of the authority. This was revealed in an interview on CNN this Monday (10th).
The minister said, “I am very close to Mr. Garipolo, who is my Director-General and was appointed by me to the central bank. I believe he is doing a good job in BC and is curbing a series of frauds in the financial system. I am talking about changes in fintech regulation and real estate credit.”
Despite the praise, Haddad reiterated his opposition to Selic, the base interest rate currently set at 15% per year, which he classified as high. “Everyone knows my opinion: There is room for interest rates to come down.”
Haddad also reported meeting with Febraban (Brazilian Banking Confederation) and said his assessment of Celic was shared by some sectors. “Some in the business and political world agree that it is probably already time to start a cycle of cuts,” he said.
Haddad’s speech reflects growing pressure from government departments on B.C. to lower Selic rates. Last month, Institutional Affairs Minister Gleij Hoffmann went so far as to say that current interest rate levels are “out of touch with the realities of this country.”
“Interest rates do not reflect the reality of Brazil’s economy and are an impediment to growth,” he said.
Last Wednesday (5th), the central bank’s Copom (Monetary Policy Committee) unanimously decided to keep the base interest rate unchanged at 15% per year at its third consecutive meeting.
Asked about criticism of the country’s fiscal situation, Haddad said the government needed to move closer to its 2025 fiscal targets because of pooling (resources released to ministries but paid in cash at the end of the year).
The target for this year is zero budget deficit, with an acceptable range of around 0.25% of GDP depending on the fiscal framework.
According to him, the fiscal situation is better than the governments of Michel Temer (MDB) and Jair Bolsonaro (PL). “We are talking about rebalancing the public accounts and ultimately getting some surplus next year,” he said.
Haddad also highlighted the Senate’s approval of the income tax plan, labeling it an “extraordinary feat of politics.” He said the sanctions by President Luiz Inacio Lula da Silva (PT) are expected to take effect later this week, on Tuesday or Wednesday (11th or 12th).
Haddad’s allies say he should travel around Brazil touting his approval of a project that would give income tax exemptions to people earning up to R$5,000 and defending the government’s tax justice policies.
The project, which is a campaign promise of President Lula (PT), is considered one of Planalto Palace’s main bets to increase the popularity of PT members before the 2026 elections.
During the interview, Haddad also spoke about the Tropical Forests Forever Fund (TFFF). The Brazilian government had expected Germany to contribute to the fund during COP30 in Belem, but the European country did not announce the amount.
German Chancellor Friedrich Merz said the amount to be contributed to the fund had already been decided at the Economy Ministry, but the matter still needed to go through other government agencies.
An announcement is expected by the end of the year, Haddad said. He said he expected contributions to the TFFF to exceed USD 10 billion during Brazil’s COP Presidency, and cited China, the United Arab Emirates and the Netherlands as countries that have shown support for the fund.
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