The Central Bank of Brazil still assesses if an interest rate of 15% is appropriate, explains official
Brasilia (Reuters) – The Central Bank of Brazil still assesses if the 15% reference interest rate is suitable for bringing inflation to its 3% objective, Diogo Guillen, director of economic policy said on Monday.
Political decision -makers have maintained the unchanged prices at the end of July at a higher than 20 years after 450 points of base in hiking since last September. They reported that borrowing costs would remain stable for a “very prolonged” period.
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Speaking during an event organized by Warren Investmentos, Guillen stressed that the directives reported more rate.
“We always assess whether this is the appropriate rate to bring inflation to the target,” he said. “Once this rate is determined, it will remain unchanged for a very long period.”
Guillen has recognized the recent surprises of decrease in consumer prices readings, but said that the key problem in inflation is that there remains above the target, with expectations and projections that are not anchored to the official objective.
Prices increased by 5.23% in the 12 months until July, compared to 5.35% the previous month and below forecasts.
Guillen stressed that economic growth loses steam, as planned as a result of the central bank’s tightening position.
(Report by Marcela Ayres; edition by Chris Reese and Kylie Madry)
