Brazil's Mantega praises Lula for lowering attacks on central bank
By Bernardo Caram
BRASILIA, Aug 6 (Reuters) -Brazilian President Luiz Inacio Lula da Silva was right to tone down his criticism of the central bank and if he taps Gabriel Galipolo to head the monetary authority later this year that would be an excellent choice, his former finance czar told Reuters.
Guido Mantega, who was finance minister during part of Lula's 2003-2010 government, said in an interview on Monday that the leftist leader has "periodically" sought his advice on economic matters.
In June, Mantega was among economists who met with the president and advised him to stop attacking central bank chief Roberto Campos Neto for what Lula saw as Brazil's excessively high interest rates, currently at 10.50%.
Lula and Campos Neto, who was appointed by far-right former President Jair Bolsonaro, had a public spat in June after the central bank paused a monetary easing cycle despite government pressure to continue reducing rates.
Lula did lower his tone on the advice of the economists.
"There was too much noise due to Lula's criticism, so I thought this kind of thing had to stop," said Mantega, a long-time advocate of more development spending, which did not endear him to financial markets.
Mantega was Brazil's longest-serving finance minister, from 2006 to 2015, working under both Lula and his successor, Dilma Rousseff, who presided over a major economic crisis and was impeached in 2016.
Mantega, who believes the Lula administration is on a path to balance public accounts, said he supports Lula's potential nomination of Gabriel Galipolo as central bank governor when Campos Neto's term expires in December.
Galipolo, a former executive secretary at the finance ministry, has been the central bank's monetary policy director since 2023, when Lula appointed him a director. He is widely seen as the front-runner to replace Campos Neto.
Mantega argued that the next central bank head should be experienced and have a deep understanding of macroeconomics, in addition to being close to Lula and having his trust.
"Galipolo has that profile," said Mantega. "He would be an excellent choice."
NO BRASKEM, NO VALE
Lula has kept Mantega as an "informal adviser" but had the intention of appointing him for a position at a company.
In recent months, Mantega was sounded out by the government about becoming a board member at petrochemical producer Braskem BRKM5.SA, which is controlled by conglomerate Novonor and state-run oil giant Petrobras PETR4.SA.
But the talks have not progressed, he said.
"I don't know what's going on, I haven't received any additional information about it," Mantega said.
In January, media reports - including by Reuters - indicated that Lula engaged in discussions about mining giant Vale VALE3.SA and wanted Mantega to be appointed to the company's board or even as its CEO.
Vale was privatized in the 1990s and has a dispersed ownership, but the government still exerts significant influence as its main shareholders include a pension fund operated by state-run lender Banco do Brasil BBAS3.SA.
Mantega said he would not accept a role at the firm.
"There is no chance," he said when asked about Vale. "I have no wish to work there."
Reporting by Bernardo Caram; Writing by Gabriel Araujo; Editing by Leslie Adler
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
