Seoul – Finance minister Guido Mantega said today (10) in Seoul, South Korea, that, starting next year, interest rate reductions should become possible. Mantega did not mention the level of reduction. The minister stated that lower interest rates should be motivated by controlled inflation, lower public spending and subsidies through the Brazilian Development Bank (BNDES).
"President elect [Dilma Rousseff] wants lower interest rates," stated Mantega, who arrived in the South Korean capital accompanying Dilma. They are going to participate in the G20 Summit (which includes the 20 main economies of the world). "The president has been following all these matters."
Mantega pointed out that guaranteeing lower interest rates requires a series of steps, like lower public spending and subsidies through the BNDES. In the case of this institution, the minister said that it is also essential for private enterprises to act. He did not explain how.
Mantega recalled that inflation has been rising due to the greater price of commodities and of food, especially grain, like wheat and rice. The minister said that the higher inflation is motivated by the "international conjecture" and not by local questions. "This government is not forgetting inflation and neither will the next," he said.
Mantega said that in the G20, discussions will be dominated by the currency war and the decision of US president Barack Obama to buy US$ 600 billion in Treasury bills in an attempt to contain the depreciation of the North American currency. To the minister, the initiative may worsen the global economic crisis. According to him, it is fundamental for countries to join forces around common measures to avoid the worsening of the global situation.
*Translated by Mark Ament
