Lula questions central bank independence

Lula questions central bank independence

Corporate & Sovereign Strategy Economy & Policy Brazil Capital Markets Debt

Brazil's financial markets reacted coolly to comments from President Luiz Inácio Lula da Silva that criticized current monetary policy and even questioned the need for an independent central bank. Copom, the central bank's monetary policy committee, left the Selic benchmark rate unchanged at 13.75% on February 1. Market interest rates rose in response, increasing the cost of capital for corporate borrowers, and the US dollar, which had traded around BRL5.00 last week, started to appreciate again

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