The Central Bank of Brazil believes that the pace of cuts of 0.50 percentage points in interest rates per meeting is adequate under current conditions, President Roberto Campos Neto said, indicating that the outlook for 2024 is to bring costs of financing at the “lowest possible” level.
“With today’s variables we understand that 50 (basis points) is the appropriate pace, we will evaluate it at every meeting,” Campos Neto told GloboNews in an interview broadcast Wednesday evening, when asked about the possibility of speeding up the process of flexibility.
Campos Neto said the interest rate curve and other market indicators are behaving as if monetary easing is being done in a “sustainable” manner, which he added is crucial for monetary policymakers.
Speaking about the outlook for next year, he said that “it is important to keep inflation within the target, it is important to keep interest rates as low as possible so that we can consolidate this process that we have been carrying out for some time.”
After keeping rates on a rising cycle for almost a year to control high inflation, the BC began cutting interest rates in August and, as of today, has cut rates by 200 basis points to 11.75 %, signaling further cuts of 50 basis points at each level. the next two economic policy meetings.
The monetary authority expects Brazil’s economy to grow 1.7% in 2024, following an expansion of 3.0% this year, but Campos Neto said there was a “good chance of a more positive orientation” for the business next year.
He cited the approval of tax reform and revenue-raising measures, as well as indicating a marginal improvement in the external scenario.
Source: Terra
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