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Montevideo, July 13th 2024 - 21:40 UTC



Lula believes Selic should have been lowered

Saturday, June 22nd 2024 - 09:37 UTC
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After Dec. 31 Lula will have the opportunity to choose a new BCB CEO After Dec. 31 Lula will have the opportunity to choose a new BCB CEO

Brazilian President Luiz Inácio Lula da Silva was strongly critical of his country's Central Bank's (BCB) decision not to lower the benchmark Selic interest rate this week and leave it at 10.5% per annum instead.

”It was a shame, Brazil and the Brazilian people are losing with this interest rate (...) The more Brazil pays in interest, the less money there is to invest internally and that has to be treated as an expense,“ Lula said in a radio interview.

”I don't see the financial market concerned with the homeless, with those who recycle paper, with the unemployed, the market doesn't talk about the people who need the State,“ he added while criticizing BCB CEO Roberto Campos Neto, who was appointed by former President Jair Bolsonaro and works independently from the federal government as per the 2021 Autonomy Act. Campos Neto's term expires on Dec. 31, at which time Lula will be allowed to choose a new CEO.

”A president should not meddle in Monetary Policy Committee (Copom) matters. In my previous mandates I did not interfere in the Central Bank,“ Lula also explained. ”But at one point they decided to have an independent Central Bank“ with ”autonomy to serve whom?“ he wondered after repeatedly claiming over the past few days that Campos Neto's behavior was ”inappropriate“ because he belongs to a political sector and has therefore no autonomy, thus working ”to harm the country than to help it.“

”There is no explanation for the interest rate as it is,” Lula insisted.

The PT leader also said this week that he would enact the bill to allow casinos in Brazil currently being treated in Congress. However, he warned that such an initiative would not be saving the country in terms of revenue and job creation. Although gambling has been banned in Brazil since 1946, “there’s no reason not to sanction it,” Lula reckoned.

The bill has been approved by the Senate’s committees and is now awaiting floor approval before being submitted for presidential sanction. It has already been accepted by the lower house.

According to Agencia Brasil, the bill allows casinos to be set up in tourist centers or leisure complexes—such as high-standard hotels (100+ rooms), restaurants, bars, and venues for meetings and events. The text also suggests that a license could be issued for one casino in each state, with a few exceptions, like São Paulo, which could have up to three casinos, and Minas Gerais, Rio de Janeiro, Amazonas, and Pará, with up to two each, on the grounds of population or territory.

Lawmakers opposing the bill mention the increase in gambling addiction and the creation of an environment favorable to prostitution, drug use, and organized crime while Lula said he was not fond of gambling but he believed it should not be treated as a crime.

“I don’t believe it when people say, ‘if there’s a casino, the poor will spend everything they have.’ The poor won’t go to the casino, the poor will work in the casino, they might even see their town develop, but they won’t go because the casino is something for people who have money,” he argued.

Those in favor of the bill point to the economic gains, job creation, and tourist development in casino regions, as well as the increase in tax revenue for the government. Despite agreeing with these benefits, the president said that “this is not going to solve Brazil’s problem.”

“The facile belief that it’ll create two million jobs and bring about development is a misconception. My gamble is to get the Brazilian economy growing again; my gamble is to invest heavily in professional and technical education, in universities, and in primary education; my gamble is to strengthen full-time schools throughout Brazil, to create jobs, increase salaries, and distribute income. That’s what makes people happy. That’s the gamble people have to take, and that’s the gamble the people are going to win,” he said.



Categories: Economy, Politics, Brazil.

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