BRASILIA (Reuters) – Brazil’s Finance Minister Fernando Haddad said on Wednesday that he trusts central bank officials when asked about the prospect of an interest rate hike at the upcoming monetary policy meeting this month.
In an interview with GloboNews, Haddad noted that it would not be “elegant” for him to comment on what the central bank should do.
Policymakers will meet on September 17-18, and bets on an interest rate hike have increased after second-quarter data showed stronger-than-expected economic growth.
The central bank has kept the benchmark rate steady at 10.5% since June, but warned in July that it would not hesitate to raise borrowing costs if needed amid a more challenging outlook for consumer prices.
Annual inflation hit 4.35% in mid-August compared to a 3% official target.
Amid rising social security spending, Haddad said that the government is not discussing a potential new pension reform but acknowledged there is “some discussion” about categories that were excluded from the previous reform and may eventually make their contribution.
When asked about adjustments to other mandatory expenses that could provide fiscal relief, such as unlinking certain expenditures from the minimum wage growth, Haddad said the government is open to discussing any topic.
“But politics has its own timing, and that requires due caution,” he said.