Temer says lower inflation to lead to reduced interest rates

President Michel Temer said today (Jan. 9) in Rio Grande do Sul that, due to the recent drop in inflation, the government is already working with the possibility of a scenario with lower interest rates. He reiterated his interest in working for a simplified Tax Reform which, he said, could result in the revision of the federative pact—an agreement among the states and the federal government that includes decentralized government and decentralized revenue collection.

"When we came [to power], the expected inflation was 10.7%, and we reached 6.7%. We cut 4 percentage points in six months. Certainly and surely, with inflation falling, interest rates will also drop. And as [the interest] falls responsibly, it will influence our country's investments," said the president, during a visit to regions flooded in Rio Grande do Sul due to recent rains.

Temer added that, in just seven months in office, he succeeded in putting several reforms in place. "Other [reforms] will be adopted. I shall note: one of them will be the simplified Tax Reform," he said.

Translated by Amarílis Anchieta