Death interest

The directors of the Central Bank of Brazil are mostly technocrats, economists, considered notable because they speak a chronic, hermetic economic jargon. I don't know if it's an easy subject, but when you don't want to explain, 'speaking in a complicated way' is a good way out for the right wing. This 13,75% rate, unilaterally imposed by the Central Bank, paralyzes the country, jobs are dying, industries are stagnating, companies are closing down and giving collective vacations, there will be even more hunger. Unimaginable even for Nobel laureate economist Joseph Stiglitz, who defines the rate as 'shocking' and a 'death penalty' for the economy.

Some conservative commentators argue that high interest rates would reduce inflation and that it is necessary to curb excessive purchasing power and the money supply. Well, we live in the PIX era; banks and even stores give cards to their customers at no cost to the Mint or Central Bank.Physical currency exists only in the minds of older generations. The Mint doesn't need to run its presses with its colorful banknotes protected from counterfeiting; besides, who has ever received a R$200,00 note? Of course, who uses money like they used to?!

From the debris of the government transition, what remains is anachronistic monetarism, whereby the Central Bank can impose exorbitantly high interest rates without any plausible explanation—13,75%, for example—which clearly sabotages the growth of industries, jobs, and the country's recovery. According to the Central Bank's latest report, it seems the idea is to raise it well above common sense, 'to combat inflation'! 

They asked Lula if he would get involved in the Russia-Ukraine war. "No," said Lula, "we're going to seek a peace plan!" They didn't ask Lula, but he spoke harshly about the high interest rates set by the Central Bank. 

Renowned Brazilian economists claim that Central Bank interest rates are at unacceptable levels and have signed a manifesto: Bresser Pereira, Leda Paulani, Mônica de Bolle, Luiz Gonzaga Belluzzo, Luciano Galvão Coutinho, Nelson Marconi, Antonio Correa de Lacerda, Clélio Campolina, Paulo Nogueira Batista Jr., and Lena Lavinas. 

One of the architects of the successful Real Plan, André Lara Resende, also rails against this obtuse monetarism of the Central Bank. According to him, in his article "Interest Rates, Currency and Orthodoxy," available as a PDF online: "Times have changed, the theory has been revised reluctantly, but the attachment to monetary orthodoxy remains as strong as ever. Today, orthodoxy no longer dictates the rules for controlling monetary aggregates, but for the interest rate." If the interest rate is kept high for too long, it increases inflation instead of lowering it, says the economist.

Jeffrey Sachs, Nobel laureate in economics, stated that "Brazil is punished by extremely high interest rates, by high interest rate policies of the Central Bank, which are very difficult to explain," adding that "Brazil's fiscal situation is totally distorted by extraordinarily high interest rates." 

An independent bank?! Well, let its president be held accountable, not on Roda Viva, but in Congress!