Meirelles Says Has Always Supported Brazil Central Bank Autonomy
(Bloomberg) -- Brazil’s Finance Minister Henrique Meirelles said he has always supported the central bank’s autonomy, and that any comments by him on monetary policy would be inappropriate.
"I always said that it was negative for the finance minister to comment on what the central bank should or could do, and that it hinders the central bank because the finance minister is a very strong figure," said Meirelles, who ran the central bank from 2003 to 2010.
The minister made the comments to reporters in New York on Wednesday, according to a transcript published on the ministry’s website. Earlier on Wednesday, Meirelles told Bloomberg in an interview it’s "highly probable" the benchmark interest rate will fall by year-end.
Brazil’s central bank has autonomy to set the key rate, though it’s not fully independent and its leader can be fired by the president. The board has kept borrowing costs unchanged at 14.25 percent for nine straight meetings, as it focuses on taming almost double-digit inflation rather than stimulating growth in the recession-battered economy.
Meirelles also told reporters on Wednesday that congressional approval of government legislation to limit public expenditures would cause the economy’s structural interest rate to decline.
The legislation "ensures a great deal of visibility, eliminates an uncertainty, which reduce fiscal risk premiums that are a component of interest rates," he said in the statement, referring to the economy’s structural interest rate.