Politics · Brazil · 4 hrs ago
Brazil finance minister says Lula is not considering interest-rate cap
Brazil’s finance minister said Lula is not considering an interest-rate cap proposed by economist André Lara Resende.
The idea would link the benchmark Selic rate to inflation and economic growth, rather than leave it to current policy arrangements.
Durigan said no meeting with Resende is scheduled, and BNDES President Aloízio Mercadante also said the proposal is not being discussed inside the government.
Resende argues that high interest payments, rather than primary government spending, are driving Brazil’s rising public debt.
Brazil’s gross public debt is 82.9% of GDP, its highest level since 2021, while the Selic rate is 13.75% a year.
Lula has previously criticized the central bank’s independence and called for lower rates, while debate continues over the government’s fiscal plans.
The government has not said it will take up Resende’s proposal, and no meeting with him is planned.
Brazilian Finance Minister Dario Durigan said President Luiz Inácio Lula da Silva is not considering a cap on interest rates.
Durigan said no meeting is scheduled between Lula and economist André Lara Resende, who has proposed a new framework for setting the Selic rate.
BNDES president Aloízio Mercadante also said there was no planned meeting or government discussion of the proposal.
Resende’s proposal would gradually lower the Selic rate to 7.5% over 12 months and create a National Fiscal and Monetary Council.
The Selic rate is 13.75% a year, and Brazil’s gross debt is 82.9% of GDP, according to the article.
- Who
- Finance Minister Dario Durigan said President Luiz Inácio Lula da Silva is not considering the proposal.
- What
- The proposal would cap or otherwise limit the Selic interest rate. Durigan said it is not on the president’s agenda.
- When
- Sunday, November 1, 2026.
- Where
- Brazil.
- Why
- The statement followed a report about a possible meeting with economists and proposals to address the fiscal problem.
Brazilian government officials
André Lara Resende
Proposal's status
Brazilian government officials
Durigan said an interest-rate cap is not on Lula's agenda, and Mercadante said the proposal is not under government discussion.
André Lara Resende
Resende has proposed a framework to reduce the Selic rate through coordination of fiscal and monetary policy.
Approach to interest rates
Brazilian government officials
The article says Lula has criticized high interest rates, but officials said the cap proposal is not being considered.
André Lara Resende
Resende argues that high interest costs, rather than primary spending, are the source of Brazil's fiscal problem.
Lara Resende renewed his argument in an article that Brazil's fiscal problem lies in interest costs rather than primary spending.
Durigan said an interest-rate cap was not on Lula's agenda and that no meeting with Lara Resende was scheduled.
- Selic rate
- 13.75% a year
- Proposed initial target
- 7.5% after a gradual reduction over 12 months
- Proposal's council
- National Fiscal and Monetary Council
- Gross debt
- 82.9% of GDP
- Adjustment cited by Folha
- At least R$250 billion over four years
What people are saying
None of these ideas, such as an interest-rate cap, is on the president's agenda.
There is no meeting scheduled between the president and Lara Resende.
This proposal is not in the government.