Haddad and Campos Neto meet in SP to maintain alignment, say sources

In the week of the first meeting of the Monetary Policy Committee of the Central Bank this year, Roberto Campos Neto returned from vacation and his first appointment in São Paulo was a meeting with the Minister of Finance, Fernando Haddad. It was an alignment meeting, as government interlocutors told the column.

The meeting, which took place this Monday morning at the Treasury office in São Paulo, drew the attention of the financial market due to its proximity to the Copom, in an environment of criticism of the BC’s independence and the system of inflation targets set by Luis Inácio Lula da Silva.

Campos Neto and Haddad have been talking constantly and will maintain frequent dialogue to align everything that is being done by the government, sources told CNN.

The BC president’s visit was considered a “kindness”, an initiative that reinforces the willingness to keep an open channel in the debate on monetary policy, in charge of the Copom, and fiscal policy, under the management of Fernando Haddad.

In recent weeks, the BC has been the target of criticism by the President of the Republic, who questioned the current interest rate, 13.75% per year, and the inflation targets to be pursued by the Copom, considered too low by Lula.

The target for the IPCA in 2023 is 3.25%, and 3% for 2024 and 2025. The expectation of economic agents, according to the Focus report, estimates that inflation will remain at 5.74% this year, which would mean a third consecutive year of failure to meet the target by the monetary authority.

Sources consulted by the column rule out changing the inflation target for the time being, considering the noise this could cause, in addition to affecting the Central Bank’s credibility.

Next Wednesday, the Copom will announce a decision on interest rates and should maintain the Selic rate at 13.75% per annum. The market has greater expectations about the announcement of the decision, which should contain warnings about the effects of an irresponsible fiscal policy and the displaced debate on the targets for the IPCA that may impact inflation and the reduction of interest rates this year.

According to Focus, the Selic should end 2023 at 12.5%, with rate cuts beginning only in the third quarter. Copom’s strategy already targets inflation in early 2024, when the IPCA should approach 3%, the BC’s target for next year.