SAO PAULO (Reuters) – Brazil’s Finance Minister Fernando Haddad said on Monday that despite the country’s high benchmark interest rate, he repeated his criticism of it and that the new government will continue to take steps to expand the supply of credit.
Speaking at an event hosted by Fiesp, Brazil’s largest industry association, he listed eight proposed bills already “ready to be tabled” in Congress, including one to modernize bank credit guarantees The bill should soon be in the Senate.
After a meeting with Central Bank Governor Roberto Campos Neto this morning, Haddad said he had committed to unwinding all paralyzed central bank credit schemes, but gave no further details.
The minister, who insists on the importance of consumer credit to boost economic activity, predicted that the popular Pix instant payment system will become a credit tool from this year.
He also said he was in favor of differentiation to encourage companies and guarantee entry of new players into the credit market. However, he cited the high level of Brazil’s benchmark interest rate Selic – currently at 13.13% – as a hurdle. Independent central banks meet this week to make policy decisions.
” Obviously we have Selic issues and it’s a hurdle for all of us. You can lower loan spreads, improve the collateral system, but Selic will always be a hurdle, no alignment Lower interest rates and democratize credit,” he said.
Haddad said he would try to achieve a “healthy balance” between exchange rates and interest rates in the short term.
The Minister defended the re-industrialisation of the country with climate change in mind, stressing that natural gas could play a role in accelerating the energy transition process being planned, adding that the Government’s Pre-salt gas is “very interesting”.
He also said that ethanol would “grow naturally” by tweaking the pricing policy of state oil company Petrobras.