Brazil re­ces­sion, global econ­omy to help curb prices: Cen­tral bank

The Pak Banker - - COMPANIES/BOSS -

BRASILIA: Most mem­bers of the Brazil­ian cen­tral bank board be­lieve a re­ces­sion at home and down­ward pres­sures on the global econ­omy will help bring in­fla­tion back to tar­get in 2017, sig­nal­ing pol­icy-mak­ers may stay put in com­ing months. That ma­jor­ity in the cen­tral bank's eight-mem­ber mon­e­tary pol­icy com­mit­tee, known as Copom, sur­prised mar­kets last week by keep­ing its bench­mark Selic rate at 14.25 per­cent af­ter sig­nal­ing an in­crease to rein in prices. Two Copom mem­bers voted to raise the Selic to 14.75 per­cent. The con­tro­ver­sial de­ci­sion raised sus­pi­cions of political in­ter­fer­ence by Pres­i­dent Dilma Rouss­eff, who op­posed a rate in­crease out of fear it could ham­per her govern­ment's plans to jump­start the econ­omy. "It is nec­es­sary to mon­i­tor the im­pact of re­cent changes in the do­mes­tic and ex­ter­nal en­vi­ron­ments in the bal­ance of risks to in­fla­tion, which, com­bined with the ad­just­ments al­ready im­ple­mented in mon­e­tary pol­icy, could strengthen the in­fla­tion con­ver­gence sce­nario for tar­get of 4.5 per­cent in 2017.

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