Brazil's Finance Minister Fernando Haddad speaks during the signing ceremony for the complementary bill "Acredita Exportacao" at the Planalto Palace, in Brasilia, Brazil, July 28, 2025. REUTERS/Adriano Machado

BRASILIA (Reuters) -Brazil's finance minister said on Monday there is room for interest rates to fall, after the central bank last week kept borrowing costs unchanged for a third consecutive meeting.

"There is indeed room for rate cuts," Fernando Haddad told CNN Brasil, adding that he had heard the same view from banks during a meeting earlier with industry group Febraban.

But while many may have views on interest rates, the decision ultimately lies with the central bank, Haddad said.

Policymakers last week kept Brazil's benchmark Selic rate at 15%, the highest in nearly 20 years, and maintained a hawkish stance, signaling rates would stay at that level for a "very prolonged" period to bring inflation back to its 3% target.

Haddad said Gabriel Galipolo, who was previously his deputy at Brazil's finance ministry, was "doing a good job" as governor at the central bank, which is tackling a range of issues beyond interest rates.

These included measures to curb abuses in the financial system inherited from the previous administration, he said.

Galipolo, who was appointed by President Luiz Inacio Lula da Silva, has led the central bank since January.

Haddad said Lula's government expects to close the year with a primary budget result close to zero.

The official target is a zero primary deficit, with a tolerance margin of 0.25% of GDP either way.

(Reporting by Marcela Ayres; Editing by Alexander Smith)