Brazil sent a key signal about its inflation

Brazil sent a key signal about its inflation

The Brazilian Finance Minister, Fernando Haddad, declared himself a supporter of take a long-term view of inflation and for the Central Bank to start cutting interest rates.

He added, however, that the government could not anticipate any decision on changing the inflation targets set by the National Monetary Council, made up of himself, the Minister of Planning and the governor of the Central Bank.

“I think a continuous inflation target is much better than looking at the calendar year,” Haddad said in an interview with CBN radio.

The National Monetary Council will set the annual inflation target for the next three years at its June meeting.

President Luiz Inácio Lula da Silva has advocated higher targets and less restrictive monetary policy. The central bank, for its part, has suggested that the debate may have raised inflation expectations, forcing interest rates to be kept at 13.75%, the highest level in the current cycle.

Brazil’s inflation rate slowed more than expected in the year to mid-April, reaching its lowest point since the end of 2020.

Haddad reiterated his criticism of the central bank, saying the bank could start cutting rates now and that the inflation forecast for next year was “very moderate.”

After the information that appeared in the media that named his executive secretary, Gabriel Galipolo, as a possible candidate for the board of the central bank, the minister said that the Government would announce the chosen ones once the decision was made.

However, he acknowledged that Galipolo could be a candidate for various public offices.

Source: Ambito

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