Brasília – The Brazilian Central Bank will make all necessary efforts to keep inflation as low as possible this year and prevent the price hike from bleeding into 2016. So said the bank’s Economic Policy director Luiz Awazu Pereira da Silva on presenting the Inflation Report this Wednesday (24th).
The director claimed the increases in the benchmark interest rate, aka Selic, currently at 13.75%, have not been sufficient to steer inflation towards the midpoint of the target (4.5%) in 2016. “We believe further work is needed, because our target for 2016 is to reach 4.5%,” he said.
The Selic rate has been raised on six consecutive occasions, in a bid to curb inflation, which is poised to exceed the top end of the target range this year. The Central Bank’s own projection is for 9% inflation in 2015. In 2016, a 4.8% rate is expected. The target’s ceiling is 6.5%.
Awazu believes the best the Central Bank can do to help the economy grow is to deliver in-target inflation in 2016. “Inflation is one of the most hazardous elements when it comes to the financial health of families. It primarily affects the lower-income families.”
*Translated by Gabriel Pomerancblum
