BRAZIL-Some news

A most unusual day

Yesterday was a most unusual day for news.

• First, Lula humbly announced on national TV that he is “the most honest person in Brazil”. That served to clear up any doubts among many Brazilians

• Second, in spite of market expectations (and my forecast) the Central Bank announced that the 14.25% base interest rate (SELIC) would remain unchanged. Market expectations were initially for a 0.5 percentage point increase and later reduced to 0.25 percentage points on the heels of a public statement by Central Bank President, Alexandre Tombinni. Virtually everyoneexpressed surprise with the announcement that the rate would not be changed. Many analysts consider it a harbinger of rising inflation going forward.

• Finally, Vice President Michel Temer met with President Dilma Rousseff ostensibly to mend the fences that have estranged them in recent weeks. The first meeting (a private one with Dilma) lasted 15 minutes and this was followed by the inclusion of Jacques Wagner, Palace Chief of Staff and Ricardo Berzoini, Government Secretary for 1 hour. Reports described the meetings as “formal”. Analysts suggest that neither Dilma nor Temer left the meetings trusting each other any more than when the meetings began.

It was reported that Temer told Dilma that she should “listen more and talk less”. I once got the same wise advice from my Irish-descendant grandfather!

Perhaps Temer would  have left a meeting with Lula – Brazil’s most honest man – somewhat more comfortable than he left the meeting with Dilma.

That’s life, I guess!