Fiesp calls reduction of Selic positive but insufficient

The acting president of the São Paulo Industrial Federation (“Fiesp”), João Guilherme Ometto, praised the decision by the Central Bank’s Monetary Policy Committee (“Copom”) to reduce the country’s basic interest rate, the Selic, from 12.5% to 12%, but called it insufficient. Ometto said the Copom may have committed a “grave error” by acting so conservatively and not reducing the Selic even more against a background of “an economic slowdown both domestically and abroad.”

“In order for the country to maintain a strong rhythm of growth, what is needed is a strong reduction of interest rates, while maintaining prices under control,” declared Ometto. “Keeping interest rates high is just repressing consumption and subjecting Brazil to the effects of the international crisis.”