INFLATION
Is Brazil's inflation target unrealistic? This economist thinks so
The Central Bank’s mandate is to pursue the government’s inflation target. But that target may be unrealistic for Brazil. Photo: Rafa Neddermeyer/EBC
The Central Bank on Wednesday confirmed that it is keeping Brazil’s benchmark interest rate unchanged at 15%, a move widely expected by market analysts. The monetary authority said its contractionary policy must be maintained “for a rather prolonged period” to ensure inflation converges to the official target, currently set at 3% with a tolerance band of between 1.5% and 4.5%.
The benchmark IPCA consumer price index rose 5.17% in the 12 months through September. Still, analysts expect inflation to ease in the coming months, helped by the Brazilian real's appreciation against the US dollar, slower food inflation and potential declines in fuel and energy prices.
This week, top investment firms’ median year-end inflation projection fell for the sixth consecutive week, now at…
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