Lula Urges Rate Cuts, Telling Central Bank to Weigh Treasury and Planning Actions

Overview

• Speaking at a housing event on Wednesday, Lula said the Central Bank could lower borrowing costs if it factors in steps by the Treasury and the Planning Ministry and he name-checked bank chief Gabriel Galípolo, saying he will speak with him after his Europe trip.
• The government expanded Minha Casa Minha Vida with R$20 billion from the pre-salt Social Fund to finance homes for families in the program’s faixa 3, which covers incomes up to R$9,600 a month, according to Valor Econômico.
• Officials also adjusted Reforma Casa Brasil by widening who qualifies, raising the maximum loan size, and trimming interest for home improvements, in a push to speed construction and hiring.
• Lula defended using FGTS, the worker severance fund that also backs housing loans, for its original purpose of protecting workers and financing home purchases.
• He argued that rates remain high even after the Central Bank cut the Selic to 14.75% in March, the first reduction in nearly two years, and he framed the new measures as help for middle-income earners who want to swap rent for a mortgage.