Balance of total financing and loans went from R$3.2 billion in January 2019 to R$6.3 billion in October 2024
The president of Roberto Campos Neto, made his last appearance at the (Monetary Policy Committee) this Wednesday (Dec 11, 2024). In command since 2019, the country’s credit stock grew 93% during his tenure as head of the agency.
The nominal balance went from R$3.2 billion in January 2019 to R$6.3 billion in October 2024. The value represents the total financing and loans registered by the monetary authority.
Read in the infographic below how the credit stock behaved:
The evolution of free and earmarked credits behaved in a similar way. Read below how it varied during Campos Neto’s management and what the difference is between each one:
- targeted (+76.7%) – serve public policies, such as rural and real estate credit. Rates are regulated and conditions defined by standards;
- livres (+107,3%) – banks determine rates and conditions defined by the market without mandatory targeting of sectors.
The credit stock reflects the pace of economic activity. The expansion in the volume of financing, consumers and companies increase consumption. There may be pressure on inflation.
The Central Bank monitors the movement closely to make its decisions, especially related to interest rate policy.
EXCHANGE RESERVES
International reserves, that is, the country’s assets in foreign currency, function as a type of “security cushion” for Brazil to face obligations abroad and shocks of an external nature, such as currency crises.
The indicator increased by US$14.7 billion on December 9, the most recent data, compared to the beginning of the Campos Neto administration.
GDP
The Gross Domestic Product is the sum of everything the country produced in a given period. It is one of the most important indicators of an economy’s performance.
During Campos Neto’s term, GDP fell during the pandemic. It grew above 3% in 2023, with a similar outlook for 2024.
THE CAMPOS NETO ERA
Roberto Campos Neto in 2019. He was nominated by Paulo Guedes, former Minister of Economy of the government (PL). If he were returned to the position by Lula, he could stay until 2028 and become the longest-serving president of the BC, surpassing Henrique Meirelles (8 years).
Responsible for appointing the directors of the monetary authority, Lula is critical of Campos Neto and proposed economist Gabriel Galípolo to lead the body from 2025. Campos Neto also said he was to reappointment and that until December 2024.
Campos Neto held 46 Copom meetings during the period. The basic interest rate (Selic) reached the lowest level in history during the Covid pandemic, when it was 2% per year. Countries implemented monetary stimulus measures to increase the level of economic activity during social isolation.
The incentives were added to the governments’ expansionary fiscal policies. As a consequence, global inflation rose. Measured by the IPCA (Broad National Consumer Price Index), it reached 12.13% in the 12 months until April 2022.
The rise in the rising price index led the Central Bank to raise interest rates to control prices and expectations. The body carried out the biggest monetary tightening cycle of the 21st century. the Selic from 2.00% to 13.75% per year – an increase of 11.75 percentage points from 2021 to 2022.
Monetary tightening even before the 2022 elections is Campos Neto’s main argument to defend that monetary policy decisions . Theoretically, Bolsonaro could use the lower rates to make a popular appeal.
President Lula and allies criticized the BC president. They accused him of harming the country with high interest rates during the PT administration.
The Central Bank cut interest rates again in August 2023. The cycle lasted until June 2024, with the indicator remaining at 10.5% per year. The adverse global scenario, uncertainties about public accounts and the heated job market once again raised future expectations for inflation.
The Selic rose again in September. It started with an increase of 0.25 percentage points, which accelerated with each meeting.
