Finance Minister Fernando Haddad stated that, if he were a Central Bank director, he would vote for lowering interest rates, deeming the 10% annual real rate unsustainable. The comment came on Tuesday, November 4, 2025, a day before the Copom meeting. Analysts view the criticism as counterproductive for the government and economy.
Finance Minister Fernando Haddad declared on Tuesday, November 4, 2025, that the 10% annual real interest rate 'does not hold up'. He stated: 'If I were a BC director, I would vote for lowering the interest rates'. The remark preceded the Monetary Policy Committee (Copom) meeting on Wednesday, which would decide on the Selic rate, currently at 15%.
At the Central Bank, Haddad argued that keeping the Selic high could worsen the public debt increase, reduce economic growth, and stagnate income inequality. However, columnist Vinicius Torres Freire criticized the stance, warning that a Selic cut would have little impact on 2026 economic performance and could trigger capital flight, a higher dollar, and rising rates for other terms. He noted expected 2027 inflation at 3.8%, above the 3% target, with current inflation between 4.5% and 5%.
Folha readers offered divided views. Carlos Amorim suggested that if Haddad controlled public spending, the Central Bank would cut rates, but cautioned about the election year. Luciano Prado called the BC strategy contradictory, favoring Faria Lima speculators with the 15% Selic.
Bernardo Guimarães explained that the Selic mainly affects corporate credit, with limited impact on areas like overdraft (capped at 8% monthly), credit cards (up to 400% annually), and savings (tied to 1.8% TR). Rural and BNDES credits are also minimally influenced. Public debt is projected to rise from 72% to 83% of GDP under Lula 3, per Freire.
