The reduction in the Selic Rate (basic economic interest rate) by 0.5 percentage points received criticism from the productive sector. Industry entities and trade unions called for more boldness from the Central Bank (BC) when it comes to cutting interest rates.
In a note, the National Confederation of Industry (CNI) highlighted that the 0.5 point cut is insufficient. According to the entity, controlled inflation allows for greater reductions that would make credit for investments cheaper and boost the reindustrialization policy.
“It is important that the Central Bank understands the Brazilian reality and makes its contribution to the much-needed reduction in the financial cost borne by companies, which accumulates throughout the production chains, and by consumers. Without this urgent change in stance, it becomes more difficult to advance the neo-industrialization agenda, which, consequently, nullifies opportunities for greater economic prosperity for the country”, highlighted the president of the CNI, Ricardo Alban, in a statement.
The Federation of Industries of the State of Rio de Janeiro (Firjan) asked the BC not to change the pace of cuts and maintain the 0.5 point reduction in future meetings. In a statement issued shortly after the meeting, the Copom reported that it intends to make only an additional cut of 0.5 points in May, indicating that it should interrupt the cycle of interest rate cuts in June.
“This drop of 0.5 percentage points needs to be maintained in the next meetings of the Monetary Policy Committee, given that the economy and, above all, the industry continue to suffer the effects of the still high rate. The negative result of industrial production in January reflects this scenario well”, highlighted the entity.
trade union centers
Although they indicated that the cuts are in the right direction, workers’ organizations also criticized the Central Bank’s decision. For trade unions, the still high level of interest rates harms the economic recovery.
“There is nothing to celebrate, on the contrary. It simply means that the Central Bank has been practicing a monetary policy that is harmful to the country’s development for years. Because, even having reached the lowest level in two years, the index is still high and is holding back the Brazilian economy”, highlighted in a statement the president of the National Confederation of Financial Workers (Contraf-CUT) and vice-president of the Central Única dos Workers (CUT), Juvandia Moreira.
For Força Sindical, the 0.5 point drop in the Selic is timid and insufficient to boost consumption, create jobs, improve the Gross Domestic Product (GDP) and distribute income. “A little more boldness would bring enormous benefits to the productive sector, which generates jobs and income and has long been eager for significant economic growth. This conformist sameness of the Central Bank’s technocrats is absurd”, criticized the president of Força, Miguel Torres, in a statement.