Brasília – In the wake of the elections, the Brazilian Central Bank said uncertainty regarding the economy has waned, with the prices of assets such as the US dollar going down. The information was made available in the minutes of the Central Bank’s Monetary Policy Committee (Copom)’s latest meeting, released this Tuesday (6) in Brasília. Last week, the Copom decided to keep the benchmark interest rate, known as Selic, at 6.5% per annum.
“The lessening of uncertainty helped reduce the degree of asymmetry in inflation risk assessments. This improvement notwithstanding, Copom members concluded that risks of a hike in inflation remain relevant in its risk assessment,” the minutes read.
As per the Copom’s risk assessment, high rates of idle capacity in the economy could curb inflation. Conversely, “failure to meet expectations regarding the continuation of reforms and necessary adjustments to Brazil’s economy” could lead to a spike in inflation. “This risk goes up in the event of a deterioration of the external scenario for emerging economies [such as Brazil],” the Committee said.
Translated by Gabriel Pomerancblum
