(Reuters) – Brazil’s Finance Minister Fernando Haddad said on Thursday that the central bank has an opportunity to lower interest rates to help boost economic growth as fiscal and monetary policies are converging.

“I want to believe that the central bank has a window of opportunity that I hope will be taken advantage of so that Brazil can think about economic and sustainable growth,” Haddad told journalists in China, where he is accompanying President Luiz Inacio Lula da Silva on a high-profile visit.

Haddad’s remarks come a day after central bank governor Roberto Campos Neto said that while inflation has decreased, persistent pressures remain, stressing that the demand-driven component of inflation in the country remains “relatively strong.”

Despite frequent criticism from leftist Lula and his political allies, policymakers have kept the interest rate unchanged at a six-year high of 13.75% since September.

Haddad noted that economists from various schools are advocating for the beginning of a trajectory of lowering interest rates, as the capital market is stalled and waiting for measures from the monetary authority.

The minister also highlighted that everything is aligning towards harmonizing fiscal and monetary policies, citing factors such as cooling inflation, a stronger Brazilian currency, and a future interest rate curve decline.

“There are clear signs,” he added.

Haddad also mentioned that Lula wants multilateral banks such as the BRICS New Development Bank (NDB) to serve as catalysts for the use of currencies other than the dollar and euro in trade.

“The possibility of transactions in local currencies is a concrete possibility that has already happened with reciprocal credits and could advance,” he stated.

(Reporting by Marcela Ayres; Editing by Steven Grattan and Sharon Singleton)

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