Brazil’s Haddad sees positive signs from cenbank on fiscal efforts

SAO PAULO (Reuters) – Brazilian Finance Minister Fernando Haddad said on Thursday the country’s central bank has sent “several signs” that measures being taken by government to balance public accounts, including a newly proposed fiscal framework, were “consistent”.

As the government pressures policymakers to lower interest rates, Haddad highlighted in an interview with BandNews that central bank chief Roberto Campos Neto has praised the fiscal efforts made so far.

Campos Neto at an event on Wednesday said the efforts had eliminated the risk of a “more uncoordinated” debt trajectory, but emphasized there was no mechanical relationship between the fiscal situation and interest rates as the critical factor was how the measures would impact inflation expectations.

Nonetheless, Haddad said that congressional approval of the fiscal framework would help to bring lending costs down.

Brazil’s benchmark interest rate currently stands at a six-year high of 13.75%.

“If public accounts are in order, there is no reason for that level of interest rates,” Haddad said.

The minister also said he was working to get debt renegotiation program Desenrola launched in the first half of the year after previous deadlines were missed in February and March.

Reuters reported last month, citing sources, that the government had been facing technical issues and open questions about the role of the private sector in the program.

Haddad confirmed the government was still trying to convince companies to provide data for the Desenrola software.

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