Lula Says Central Bank Can’t Be at the Service of Markets

(Bloomberg) -- President Luiz Inacio Lula da Silva escalated his attacks on Brazil’s central bank, saying the institution led by Governor Roberto Campos Neto needs to be really autonomous and not “owned” by financial markets.

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“The central bank can’t be at the service of markets,” the leftist president said during an interview with a local radio on Tuesday. “It can’t be subject to pressure.”

Lula has resumed his criticism of the monetary authority since all of its board members decided to interrupt the monetary easing campaign on June 19, leaving the benchmark rate at 10.5%. He has particularly targeted the bank’s chief, who was appointed by former President Jair Bolsonaro to serve a four-year term that ends in December.

During the interview, Lula expressed concern about the real, which has lost more than 13% so far this year. On Monday, it closed at its weakest level in nearly 2-1/2 years, due at least in part to uncertainty about the future of monetary policy next year, when board members appointed by the current government will be majority.

Lula described the real’s weakening as “not normal” and caused by “speculation.”

--With assistance from Srinivasan Sivabalan.

(Updates with Lula’s comments on real’s weakening starting in fourth paragraph.)

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