Brazil’s Lula says inflation targets too ‘rigid’
2023.06.29 08:42
© Reuters. Brazil’s President Luiz Inacio Lula da Silva speaks during the launching ceremony of the Plano Safra 2023/2024, an action plan for the agricultural sector, in Brasilia, Brazil June 27, 2023. REUTERS/Adriano Machado
SAO PAULO (Reuters) – Brazilian President Luiz Inacio Lula da Silva said on Thursday the country’s inflation targets were excessively rigid and renewed criticism of the central bank for high interest rates ahead of a meeting that will set its 2026 inflation goals.
Lula’s remarks came as financial markets closely watch the National Monetary Council’s (CMN) meeting later in the day for potential changes on inflation targets, which are currently at 3.25% for 2023 and 3% for the next two years.
“Personally I think Brazil should not have such a rigid inflation target if it cannot meet it,” Lula said in an interview with Radio Gaucha. “But it’s not prudent for me to talk about the monetary council ahead of its meeting.”
The CMN comprises the finance minister, the planning minister and the central bank governor, giving the federal government two out of three votes on one of thorniest economic policy debates in Latin America’s largest nation.
Lula previously hinted at potentially changing inflation targets to increase them and enable monetary policy easing, a move that ended up worsening expectations for consumer price changes.
