Brazil's high interest rates attributed to country's debt, says Central Bank Chief

Brazil’s central bank chief said high levels of public debt are to blame for interest rates steady at a six-year high, countering President Luiz Inacio Lula da Silva’s criticism of monetary policy and appeals for a rate cut.

If government debt were low, “the cost of money would be cheaper for everyone,” Roberto Campos Neto said during a TV interview with Brazil’s CNN.

Campos Neto said it’s not the central bank’s fault when the government issues a bond and pays yields of 6% above inflation, like Brazil did recently. “There is a risk that justifies the real interest rate is 6%,” he added.

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