Finance Minister sees room for interest to keep falling

Brazil’s Finance Minister Fernando Haddad said he sees room for further cuts in the country’s benchmark interest rate in the coming months.

“We’re at a moment when we can make the economy grow, and we still have a lot of monetary fat to burn. We still have a [benchmark interest] rate of 12.25 percent [a year],” he said during an event organized by the BTG Pactual bank on Monday (Nov. 6).

The government’s efforts have reduced inflation, bringing interest down and opening up more room for economic growth, the minister noted. “Inflation is not being lowered artificially. Work is being done to make this happen, already as part of a cycle of cuts [in the interest rate], which in my opinion should continue, because we will continue to work together to pursue this cycle of cuts,” he went on to state.

The only driver currently making it difficult for interest rates to decline even further in Brazil, he pointed out, is the interest rates in wealthier countries. “I wish to believe that the world—which is hindering us a little, from this point of view, due to the rates in the US and Europe—this, too, may be corrected over the next year.”