Minister of Economy says that the exchange rate should be between R$ 3.80 and R$ 4.20 and defends the strength of democratic institutions
Minister of Economics, Paulo Guedes stated this Tuesday, 14, that the dollar it should be on a downward trajectory, but it is blocked by the political noise in Brasília. According to the head of the economic team, the US currency should be quoted between R$ 3.80 and R$ 4.20, “if everything was normal”. The exchange ended the session this Wednesday with an advance of 0.65%, quoted at R$ 5.25. Since the beginning of the year, the currency has accumulated a high of 1.3%. “This dollar was supposed to be going down, but the political noise won’t let it. No problem, [dá] more time for exports, for our import substitution to work. No problem, we’re not in a hurry, the thing is to do the right thing, all the time,” he said. The minister once again said that he believes in Brazilian democratic institutions, but that “actors commit excesses”, alluding to the recent scale of tension between the president Jair Bolsonaro (non-party) and members of the judiciary. “Sometimes the president leaves the playpen. Sometimes a STF minister [Supremo Tribunal Federal] arrests people. There’s always someone who jumps over the fence and goes for a walk on the wild side. What happens? Institutions act and invite you to return to the enclosure. The institutions are robust, they are demonstrating this”, he said.
The minister also again defended a legal or legislative solution to the issue of precatory — what the Union’s debts that no longer have resources for are called. For next year, the federal government must disburse around R$ 89.1 billion. The Executive seeks to divide the amount through a Proposal for Amendment to the Constitution (PEC), sent to Congress, while trying to reach an understanding with members of the STF. “Our suggestion, which is in a PEC, is to create an atmosphere that any meteor that comes from now on hits and turns into a meteor shower. Every fight is to give visibility and feasibility”, said the minister during an event promoted by BTG Pactual bank. For Guedes, the term “meteor” is used because it is something from outside. According to the minister, in addition to making budget planning for next year unfeasible, the debt prevents the growth of the monthly fee. family allowance for R$300, as had already been planned. “It was under the roof, within fiscal responsibility. When we’re going to send it, the meteor arrives,” he said. The value for next year is about R$ 35 million above the 2021 account. According to the minister, almost half of the amount came from northeastern states governed by opponents of the president.
The minister also mentioned that the increase in Bolsa Família may come through the reform of the Income Tax. According to Guedes, even if the change has a neutral character – without tax increases -, it can stamp resources for the expansion of the social program. The measure is in the Senate and faces resistance from the business community, which claims that the changes will lead to an increase in taxation. According to the head of the economic team, if the agenda is blocked, the government can forward the renewal of the emergency aid with amounts of R$ 500. Currently, the benefit, with a deadline to end in October, distributes installments from R$ 150 to R$ 375. The measure, however, “will become a mess if there is no correct technical solution”, he said Guedes.
Guedes also said that the expected growth for the economy since this year is no guarantee that it will become sustainable, but that the signs point to the resumption of investments in the country. According to the head of the economic team, within ten years, the country should receive a contribution of R$ 540 billion from the private sector. The minister also claimed that there was a “roll of disgrace” in the critics’ predictions. Guedes cited that anti-government people have already pointed out the lack of a basis in Congress, the management of the new coronavirus pandemic, and that they now indicate the low economic growth expected for 2022. “The doom is announced for next year. It is evident that the crisis worries us, like the water crisis, which puts pressure on prices”, said the minister.