July 21, 2024

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Brazil’s ruling Workers’ party seeks to gag central bank chief

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Brazil’s ruling party has filed a lawsuit against the head of the country’s central bank as it steps up attacks over the pace of rate cuts and alleged political bias.

Senior figures in President Luiz Inácio Lula da Silva’s Workers’ party on Wednesday filed a lawsuit at a federal court in Brasília requesting that Roberto Campos Neto be banned from making political statements.

The lawsuit came a day after Lula publicly criticised Campos Neto, claiming that he “works much more to harm the country than to help” by not cutting rates more quickly.

“We only have one thing that’s wrong in Brazil right now — it’s the behaviour of the central bank,” Lula said on Tuesday. “We have a bank president who does not demonstrate any capacity for autonomy . . . there is no explanation for the [current] interest rate.”

The legal action marks a sharp escalation of the war of words between the Workers’ party — known commonly as the PT — and the central bank chief, which has raged since Lula returned to office for a third term last year.

Elected on pledges to kick-start Latin America’s largest economy and improve the livelihoods of its poorest citizens, Lula has sought to blame slow progress on Campos Neto — a respected former finance professional.

The central bank has been gradually reducing the benchmark Selic interest rate for almost a year, cutting it from 13.75 per cent to 10.5 per cent. Lula has criticised the pace of the cuts for being too slow.

Lula and his party have also accused Campos Neto of political bias following a series of events that appeared to show that the bank chief had links to leading rightwing politicians.

The lawsuit was prompted by reports that the bank chief had attended a dinner in his honour hosted by Tarcísio de Freitas, the rightwing governor of São Paulo and a possible future…

2024-06-19 17:58:57

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