SAO PAULO, June 22 (Reuters) - Brazilian President Luiz Inacio Lula da Silva on Thursday renewed his calls on the central bank to lower interest rates after the monetary authority decided to keep them at a six-year high in a bid to control inflation.
The bank's latest decision came on Wednesday, when it kept the local Selic rate at 13.75% for a seventh consecutive meeting but took a more dovish tone on future steps by excluding from its statement the possibility of upcoming rate hikes.
Lula, who has been a vocal critic of the independent central bank since taking office in January, again said it was "irrational" for the institution to hold rates at that level while 12-month inflation runs at around 4%.
"I think this individual has been acting against the Brazilian economy," Lula told reporters during a trip to Italy, likely referring to central bank Governor Roberto Campos Neto, who will remain in office until 2024. Neto was an appointee of former President Jair Bolsonaro.
Calls on the bank to cut rates gained momentum after 12-month inflation hit its lowest level in more than two years in May and private economists started to reduce long-term inflation expectations.
An uptick, however, is expected from July because of unfavorable base effects, and the central bank said the scenario demands patience in the conduct of monetary policy.
"There is no acceptable reason for rates to be at 13.75% as we don't have demand-pull inflation in Brazil," the leftist leader said, noting business people have also joined his appeals for lower borrowing costs.
Those include the chair of retail giant Magazine Luiza and the head of industry group FIESP. Other groups such as Rio de Janeiro's industry federation FIRJAN and real estate association ABRAINC also criticized the bank's Wednesday decision.
"It is not the government fighting the central bank," Lula said. "The Brazilian society is the one fighting the central bank." (Reporting by Gabriel Araujo; Editing by Kim Coghill)
