Galípolo praises Haddad’s “obstination” for transparency in fiscal policy

The director of Monetary Policy and future president of the Central Bank, Gabriel Galípolo, said this Monday (14) that the Minister of Finance, Fernando Haddad, has demonstrated “obstinacy” in the search for a transparent, sustainable and socially fair fiscal policy and is “clear” about what needs to be done in the fiscal area.

“From the beginning, Minister Fernando Haddad has been reinforcing this vision that fiscal and monetary policy must work in harmony, two arms of the same body, as he always mentions. And I think there is a lot of clarity, in his view, about the diagnosis and what needs to be done, this is very clear on the Treasury’s agenda”, said the director, at an event at Itaú Unibanco, in São Paulo.

Galípolo, who was executive secretary of Finance in the Haddad administration, before being appointed to the BC, stated that the “pains” in relation to fiscal policy have to do with the fact that the dynamics of politics prevent positive news from being released. produced at the speed that the market demands. The absence of news, he said, ends up generating skepticism.

Inflation target

The future president also repeated the commitment that the BC will seek the center of the inflation target, of 3%, with the instruments at its disposal. “The Central Bank has a goal and the Central Bank’s reaction function will always be carried out by pursuing the goal, and this pursuit of the goal can be done with more or less cost, depending on a series of variables that the Central Bank determines. Sometimes you have no control,” he said.

He added that, on the Finance side, managing contradictions between expectations is more complex than in the case of monetary policy. “But, knowing my friend Haddad, he is the dedicated person, his career has designed him to be that person who embodies the production of syntheses”, he stated.

BC’s role in the exchange rate

The director of Monetary Policy at the Central Bank also said that the statement that the autarchy only intervenes in the exchange market in moments of dysfunctionality was “misinterpreted”, in a period of “exceptionality”, as a sign that there would be no interference in case of a devaluation of the real.

“We later, in fact, and Roberto Campos Neto (current president of the BC) brought this up, he adapted the communication to say that there is no change from the point of view of the institutionality of the consumption of this data and the logic of action”, he stated Gallipolo.

The director reiterated that Brazil’s exchange rate regime is floating and that the rate serves as a buffer for possible shocks. The BC’s actions, he repeated, occur within an institutional framework and exclusively due to liquidity problems or excess volatility, without pursuing any exchange rate level.