Brazil‘s Senate set to approve invitation for central bank chief’s hearing

BRASILIA (Reuters) – Brazil‘s Senate Economic Affairs Committee (CAE) is expected to agree on Tuesday to invite Central Bank Governor Roberto Campos Neto to testify at a hearing on the country’s high interest rates, three sources told Reuters on Monday.

The date of his appearance before the committee has not been decided, two of the three sources with knowledge of the matter said, asking that they remain unnamed.

Committee chair Senator Vanderlan Cardoso, who submitted the invitation request, said “the current level of the basic interest rate has generated much debate in the economic sphere about the central banks obligation to reduce this rate.”

Since taking office in January, leftist President Luiz Inacio Lula da Silva has systematically criticized the banks high benchmark interest rates, which have remained at a six-year high of 13.75% since September.

Lula‘s Workers Party (PT) has asked that Campos Neto be called before Congress to explain the bank’s monetary policy decisions.

Lula has warned of an imminent credit crunch due to high borrowing costs, which would hurt growth in Latin Americas largest economy, expected to expand less than 1% this year.

Lula‘s Workers Party (PT) has asked that Campos Neto be called before Congress to explain the bank’s monetary policy decisions.

(Reporting by Marcela Ayres and Ricardo Brito; Editing by Sandra Maler)