Haddad denies discussing changes to the inflation target with Campos Neto: "No one has a monopoly on the truth."

247 - Finance Minister Fernando Haddad said on Tuesday (4) that he spoke with the president of the Central Bank, Roberto Campos Neto, about inflation targets, but pointed out that they did not specifically discuss a change in Brazil's current inflation target - at 3,25% for this year. "We did not discuss changing the inflation target," Haddad said at a forum held by Bradesco BBI, according to information published by newspaper Valor Econômico. 

The Finance Minister said he is following the arguments of academics and central bank technicians. "I'm just following the debate. There's no one who has the absolute truth in this debate [about inflation targets]. We don't want to anticipate this issue before the appropriate meeting," he added, without mentioning whether he was referring to the meeting of the National Monetary Council (CMN), scheduled for June. 

The Finance Minister gave his statement in a context where the Central Bank president is facing criticism from allies of the Lula government in the National Congress because of the Selic rate, currently at 13,75%. 

Parliamentarians who support the PT administration emphasized that high interest rates make credit more expensive, hinder purchasing power, and impede economic growth. 

One of Campos Neto's arguments is that it's necessary to control inflation. When interest rates increase, credit becomes more expensive, people have less money to spend, and prices fall. However, in the current context, consumer demand is still weak, which doesn't justify trying to control inflation. If demand rises, purchasing power increases and, consequently, interest rates can be raised to control inflation.