Brazil Debt Is the Source of High Rates, Central Bank Chief Says

Brazil’s central bank chief said high levels of public debt are to blame for interest rates steady at a six-year high, countering President Luiz Inacio Lula da Silva’s criticism of monetary policy and appeals for a rate cut, Bloomberg News reported. If government debt were low, “the cost of money would be cheaper for everyone,” Roberto Campos Neto said during a TV interview with Brazil’s CNN. Campos Neto said it’s not the central bank’s fault when the government issues a bond and pays yields of 6% above inflation, like Brazil did recently. “There is a risk that justifies the real interest rate is 6%,” he added. President Lula has attacked the central bank and its chief since January, saying current rates are “absurd,” boost unemployment and don’t need to be at a benchmark 13.75% when there are no demand pressures. He has also said Campos Neto has “no commitment” to Brazil. Read more.