SAO PAULO (Reuters)-Economic data suggest that the transmission of Central Bank interest policy may not function with full fluidity in Brazil, which requires actions to achieve “the same effects with minor doses of the medicine,” said the municipality’s monetary policy director Nilton David.
In an event promoted by the Brazilian Association of Financial and Capital Markets Entities (Anbima), David argued that the Brazilian economy presents dynamism even with fees Basic that would tend to be consideration in other countries, also citing low levels of unemployment.
“Normalizing the functionality of the country’s monetary policy, so that it is possible to achieve the same effects with minor doses of the medicine, it must be a structural goal for our economy,” he said, defending among other points a reevaluation of subsidies to companies.
“Among the challenges, there is one that seems to permeate the entire economic policy of the country: the need to revisit the reach of regressive crosses, which provide exceptions to some, but which impose a greater load on others, including many who are less able to pay,” he said.
David also defended the creation of alternatives for real estate financing and assessed that these measures should be performed in conjunction with the capital market.
“Regarding real estate credit, it is important to develop fusing alternatives together with the market, facing the structural reduction in the capture of the savings account, aiming to ensure not only the volume of appropriate resources, but also that real estate can be used as more secure and lower credit lines, such as the main economies of the world,” he said.
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BC President Gabriel Galipolo said this month that he expects to soon present a new model for housing financing in Brazil based on market fundraising.
Read more: GALIPOLO: BC studies capture model instead of the book to finance housing
In his speech, David also highlighted the need for central banks generally expanding their communication on monetary policy to a broader audience, beyond market agents.
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“This makes the Central Bank need to resort to new languages and communication channels,” he said. “In addition to being legitimate, it is welcome the growth of debate in society about the performance of monetary authority. It is an essential part of our work to clarify to the population what the Central Bank does and why it does.”
The director of monetary policy also made the assessment that Brazil has “solid, effective and modern financial system”.
“Still, we know that there are significant challenges. The constant improvement of the financial system, because of its direct influence on the competitiveness and efficiency of the economy, is an important issue in the modern world,” he said in his speech.
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(By Eduardo Simões and Bernardo Caram)
