The independence of the Central Bank (BC) is important for the country to pay less interest, said today (7) the president of the body, Roberto Campos Neto. In a lecture broadcast over the internet in Miami, United States, he declared that the body’s autonomy, which has been in force since last year, had as its main gain the decoupling of the monetary authority’s activities from political cycles.
“The main reason, in the case of Central Bank autonomy, is that it disconnects the monetary policy cycle from the political cycle, because they have different durations and interests. The more independent you are, the more effective you are, the less the country will pay in terms of the cost of monetary policy inefficiency”, declared Campos Neto during the 2023 Milken South Florida Dialogues event, which deals with digital innovations.
According to Campos Neto, the BC’s autonomy allows for the construction of agendas that go beyond the interests of a given government. He cited innovations such as Pix and open finance (authorized sharing of data between financial institutions) as legacies of the management of former BC president Ilan Goldfajn, current president of the Inter-American Development Bank (IDB), who was at the event.
“Ilan is here. He started a great work, talking about innovation. So I got there [no Banco Central], the pressure was very great, because he did a wonderful job and I thought. How can I improve what was done?”, he said.
Campos Neto’s speeches come after several public criticisms by President Luiz Inácio Lula da Silva of BC autonomy and high interest rates. Yesterday (6), during the inauguration of the president of the National Bank for Economic and Social Development (BNDES), Aloizio Mercadante, Lula classified as unjustifiable the maintenance of the Selic rate – basic interest of the economy – at 13.75% per year.
“If the business class does not speak out, if they think you are happy with a rate of 13.5% [na verdade 13,75% ao ano], they will not lower interest rates. There is no justification for the interest rate to be at that level. The rate and the explanation given to society is shameful,” declared Lula in a speech.
digital currency
In his lecture, Campos Neto said that BC is committed to creating the digital real. According to him, the monetary authority intends to integrate the digitized currency with Pix and open finance.
In the presentation distributed to the participants and disclosed by the BC’s advisory, the plans foresee that the Central Bank Digital Currency (CBDC, digital currency of the Central Bank in the acronym in English) will start operating as a pilot project in 2023 and be launched at the end of 2024 or early 2025.
