During a recent event in Cuiabá, Agriculture Minister Carlos Fávaro expressed his concerns regarding the Central Bank's interest rate policy, labeling it as 'wrong.' He highlighted that the Selic rate is currently at 15% per year, the highest in nearly 20 years, which he believes is counterproductive to fostering investment in the country. Fávaro pointed out that even with a controlled inflation rate of 4.44% per annum, the high interest rate is inhibiting economic growth.

Fávaro's critique came as he compared the current interest rate with the national consumer price index, noting that while inflation has been kept within the government's target, the elevated Selic rate does not align with these figures. He was critical of the Central Bank's reliance on high interest rates as a tool for controlling inflation, suggesting that it discourages investment, which is crucial for economic development. This sentiment reflects a growing concern among policymakers regarding the impact of high interest rates on economic activity in Brazil.

The discussion also highlights the tension between government officials advocating for more stimulative economic policies and the Central Bank’s commitment to maintaining independence in monetary policy. Fávaro's remarks may spark further debate on the appropriate balance between controlling inflation and encouraging investment in the Brazilian economy, especially as the government seeks to support small businesses through initiatives like the one launched at the event.