Americanas Executives, Brazil Central Bank Chief Asked to Testify in Congress – BNN Bloomberg
(Bloomberg) — A Brazilian Senate committee on Tuesday extended formal invitations to central bank chief Roberto Campos Neto and five former executives from beleaguered retailer Americanas SA, asking them to provide details on a pair of sagas that have gripped the country in the opening months of Luiz Inacio Lula da Silva’s presidency.
The Senate’s economic affairs committee wants Campos Neto to explain his position on Brazil’s benchmark interest rate, as Lula and his economic team continue to push for lower borrowing costs in an effort to boost economic growth. It wants the former Americanas leaders, meanwhile, to provide background on the financial collapse of the retail giant that filed for bankruptcy in January after unveiling a $4 billion hole in its balance sheet.
The company’s sudden collapse has rattled Brazil’s credit markets and raised questions about whether it will have broader implications for other major businesses and the country’s economy.
“The discovery of ‘inconsistencies’ led the financial market to ask if similar accounting methods are used by other companies,” senator Otto Alencar said in the invitation the committee approved.
Former Americanas chief executives Miguel Gomes Pereira Sarmiento Gutierrez and Sergio Rial received invitations from the committee, as did former directors Anna Christina Ramos Saicali, José Timotheo de Barros, and Marcio Cruz Meirelles. The lawmakers also invited Isaac Sidney Menezes Ferreira, the president of Brazil’s national federation of banks, to appear.
Read More: Americanas Billionaire Trio Faces Possible Brazil Congress Probe
The invitations are the next step toward a larger confrontation between congress and the retailer: Last week, a petition calling for an investigation into Americanas received enough signatures to proceed in the lower house, although it still requires the approval of Speaker Arthur Lira in order to begin.
The committee also wants to hear Campos Neto’s reasons to keep the benchmark interest rate at a six-year high of 13.75%. That has generated rampant criticism from the leftist president, who sees Brazil’s tight monetary policy as a barrier to growth and to his ambitious economic agenda.
Annual inflation has eased in each of the past eight months but cooled less than expected to 5.6% in February. Analysts expect consumer prices to rise nearly 6% this year and about 4% in 2024, according to a weekly central bank survey released Monday. Inflation expectations remain above the central bank’s targets through 2025.
Brazil’s economy, meanwhile, slowed in the final months of 2022, and the downturn is widely expected to continue this year. Most analysts forecast rate cuts by November, although traders bet the easing cycle will begin in June.
Because they’ve been invited rather than summoned, none of the recipients are obliged to appear in upcoming hearings, which have not yet been scheduled. The central bank declined to comment on the Senate’s invitation, but Campos Neto has already said that he is willing to appear in front of the committee.
–With assistance from Bruna Lessa.
©2023 Bloomberg L.P.