Brazil’s Finance Minister Comments on Interest Rates

BRASILIA (Reuters) – Brazil’s Finance Minister Fernando Haddad expressed confidence in central bank officials regarding potential interest rate changes during a monetary policy meeting this month.

In an interview with GloboNews, Haddad stated that it would be “not elegant” for him to speculate on the central bank’s decisions. Policymakers are set to convene on September 17-18, with increasing expectations for an interest rate hike following stronger-than-expected economic growth in the second quarter.

The central bank has maintained the benchmark rate at 10.5% since June, but cautioned in July that it would raise borrowing costs if necessary, especially with the challenging outlook for consumer prices. Annual inflation reached 4.35% in mid-August, exceeding the 3% official target.

Regarding social security spending, Haddad stated the government is not currently considering new pension reform, although there are discussions about categories previously excluded. He also mentioned the possibility of adjusting other mandatory expenses for fiscal relief, ensuring that politics requires careful timing for such adjustments.

Haddad emphasized the government’s willingness to discuss various topics, stating, “politics has its own timing, and that requires due caution.”