Lula Tackles Brazil's Central Bank Actions

Brazilian President Luiz Inacio Lula da Silva criticized the central bank, claiming its head, Roberto Campos Neto, harms the economy. Lula plans to appoint a new chief who balances inflation control and growth aims, as policymakers are expected to pause easing amid market volatility and unanchored inflation.

Brazilian President Luiz Inacio Lula da Silva criticized the country's central bank on Tuesday saying its chief, Roberto Campos Neto, works to harm Latin America's largest economy.

In an interview with local radio station CBN, Lula argued that the central bank's behavior is the only "thing out of place" in Brazil at the moment. The central bank will meet on Tuesday and Wednesday when it is widely expected to pause its easing cycle amid increased volatility in domestic financial markets and unanchored inflation expectations.

Policymakers cut the benchmark Selic interest rate in May by 25 basis points following six cuts of twice that size. Lula, who is set to choose the next chief of the central bank later this year, said he plans to appoint someone who does not give in to market pressure and who will conduct monetary policy considering that Brazil needs to control inflation but also have a commitment to growth.