President Luiz Inacio Lula da Silva and central bank chief Roberto Campos Neto are about to have their first face-to—face meeting since the leftist leader started his mandate in January and began a campaign to pressure Brazil’s monetary authority to lower interest rates to help boost growth in Latin America’s largest economy.
(Bloomberg) — President Luiz Inacio Lula da Silva and central bank chief Roberto Campos Neto are about to have their first face-to—face meeting since the leftist leader started his mandate in January and began a campaign to pressure Brazil’s monetary authority to lower interest rates to help boost growth in Latin America’s largest economy.
Campos Neto reached out to Lula in a letter requesting a meeting, according to two people with knowledge of the matter. The president agreed, but asked Finance Minister Fernando Haddad to join. They are set to do so Wednesday evening at the presidential palace in Brasilia, according to the public agendas of Lula and Campos Neto.
The moves by both Campos Neto and Lula were seen as goodwill gestures that were only possible now that the central bank has started to lower rates, the people said, requesting anonymity because the matter isn’t public. The last time they met was during the transition government, with Lula’s team viewing Campos Neto as arrogant, according to the people.
After taking office, Lula criticized the central bank several times, questioning the need for its autonomy and bashing Campos Neto for keeping rates at a six-year high. Since then, however, the mood has improved, the people said.
The central bank didn’t immediately reply to a request for comment.
Brazil’s central bank cut its benchmark interest rate by half a percentage point for the second straight meeting last week to 12.75% and signaled it will keep the same pace of easing at least through year’s end.
Six months into his public feud with an institution dominated by his predecessor’s appointments, Lula has begun to shape its future. Two more seats are set to open on the nine-member board in December.
Earlier this year, Lula appointed two names close to him to the central bank board, Gabriel Galipolo and Ailton Aquino. The move was the opening step in the bank’s first transition of power since the 2021 enactment of a law guaranteeing its formal autonomy.
During Lula’s initial two terms in office, the bank’s chief, Henrique Meirelles, said the president had given him de-facto autonomy to set monetary policy.
Campos Neto – the target of much of Lula’s ire – and two other directors will depart at the end of 2024. Besides improving his relationship with the president, the central bank president could also present himself as an interlocutor for the government with the opposition he is close to, one of the people said.
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