Bolsonaro Regrets Giving Central Bank Autonomy, AP Reports
(Bloomberg) -- President Jair Bolsonaro has expressed regret for signing a law that gave formal autonomy to Brazil’s central bank, according to the Associated Press.
Bolsonaro on Thursday complained about the central bank’s autonomy during a flight home from Mato Grosso state, the AP reported Friday, citing a high-level official aboard. It wasn’t the first occasion that the president, who’s seeking re-election next year, has expressed the desire to interfere in the bank, according to an unidentified minister cited by the news agency.
Bolsonaro’s office didn’t immediately reply to a request for comment. The central bank didn’t comment when contacted by Bloomberg.
Brazil’s central bank, lead by chief Roberto Campos Neto, is aggressively raising interest rates this year to bring inflation back to target -- it has delivered a total of 325 basis points in hikes so far and promised another full percentage-point increase for next month.
The bank’s hawkish stance has yet to convince economists. Inflation expectations for 2022 keep rising as the market accounts for higher commodities and electricity costs, as well as growing political noise in the run-up to the 2022 elections. Among the issues worrying investors are pressure for more public spending as well as tensions between Bolsonaro and the top court.
Campos Neto on Thursday said that “market noise” has been weighing on inflation expectations, calling on the government to “pass a responsible message about the fiscal path going forward.”
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