BRAZIL, Brazil (AP) – Brazilian President Jair Bolsonaro has begun to express irritation over the newly found central bank’s autonomy, as rising inflation poses a threat to his re-election prospects in 2022, officials said in The Associated Press.
On Thursday, during a flight home from the state of Mato Grosso, Bolsonaro said he regretted signing the bill earlier this year granting autonomy to the bank, an AP official told AP high level on board. Separately, Bolsonaro on several recent occasions has expressed displeasure with autonomy and said he would like to interfere in monetary policy, a minister who has heard such complaints told AP. Both spoke on condition of anonymity because they were not allowed to speak publicly.
The law passed in February sought to protect the bank from political interference and burn Brazil’s economic credibility among investors. Under the terms of the law, the president still appoints the head of the central bank, but cannot dismiss him for disagreements over monetary policy.
Bolsonaro in 2018 offered guarantees that he would continue to do economic policy practices and the market celebrated his election to lead the central bank: economist and former trader Roberto Campos Neto, who began a four-year fixed term in April .
Neither the presidency office nor the central bank responded to requests for comment on Bolsonaro’s statements. Following the publication of the story, Bolsonaro’s chief of staff, Ciro Nogueira, wrote on Twitter that there is no crisis between Bolsonaro and Campos Neto.
“I testify that the government’s relationship with the central bank is excellent, that the autonomy of the monetary authority is a historic and irreversible advance,” Nogueira wrote.
Banking autonomy is one of the few significant economic reforms that the Bolsonaro administration has managed to secure. Others have faced setbacks, most recently including a proposed tax reform, while the government indicates it may increase spending next year despite limited fiscal space.
This has led to a sell-off due to concerns about the outlook for Brazil’s fiscal policy, as well as speculation about the market that could give up hope about the Bolsonaro administration’s willingness or ability to make further reforms. , especially because the president continues to focus energy on his slow feud. with the Supreme Court.
Twelve-month inflation tracks nearly 9%, the fastest pace in more than five years. After the government withdrew pandemic welfare disbursements, the poor have been especially hit by the double-digit rise in food, cooking gas and electricity prices.
Economists surveyed by the central bank have raised their 2021 inflation forecast for 19 consecutive weeks and the rising cost of living is expected to exceed the bank’s target for the first time in six years.
Economists expect inflation of 3.9% in 2022, almost the midpoint of the bank’s target range after rising upward in recent weeks. Still, the minister who spoke on condition of anonymity told the AP that Bolsonaro has spoken out about his concern about out-of-control inflation during the election year.
The Supreme Court is scheduled to begin reviewing the constitutionality of the law on August 25th. Bolsonaro expressed support for the court to defend banking autonomy in a June 22 ceremony, during which he said everyone trusts Campos Neto.
His statement on lamenting autonomy responded to Campos Neto’s comments hours earlier, which the president said he would like to be able to replace with a feather blow, according to the official present. Campos Neto said at an online event hosted by the Council of the Americas that “local noise” has had an impact on 2022 inflation expectations.
“There is uncertainty, or at least a higher level of noise, in the institutional part of how Brazil works and the power struggle,” Campos Neto said, adding that the market has also understood that the government is trying to increase the spending their conditional -cash transfer program for the poor.
“In other words, the market associates some of the actions that the government is taking with the will to have a more robust program and they are relating some of the things that the government is doing to the elections, and I think that creates more noise,” he said. said ___ Biller reported from Rio de Janeiro.