Brazil VP wants to convince central bank high interest rate 'makes no sense' By Reuters

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Brazil VP wants to convince central bank high interest rate 'makes no sense'

Published Mar 27, 2023 03:52PM ET

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Brazil VP wants to convince central bank high interest rate 'makes no sense'

© Reuters. FILE PHOTO: Brazil's Vice President Geraldo Alckmin is pictured during a news conference after meeting with John Kerry, U.S. Special Envoy for Climate (not pictured), at the Itamaraty Palace in Brasilia, Brazil, February 27, 2023. REUTERS/Adriano Machad

SAO PAULO (Reuters) - Brazil's Vice President Geraldo Alckmin said on Monday the government needs to convince the country's central bank that its high interest rate "makes no sense at all."

Alckmin's comments came days after the central bank's rate-setting committee, known as Copom, kept interest rates unchanged at 13.75% for the fifth consecutive policy meeting.

The central bank's decision defied intense pressure from the new government of President Luiz Inacio Lula da Silva to reduce borrowing costs, with Lula having renewed criticism of the financial body last week.

"We have to convince the central bank that it is not possible to have the highest interest rate in the world... It makes no sense at all," Alckmin said during an event.

Brazil holds the highest interest rate in real terms - which is adjusted for inflation - among the world's major economies, according to Infinity Asset's ranking.

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