Clipping of news on Brazilian Culture, Law and Citizenship
03/10/2014
This article was translated by an automatic translation system, and was therefore not reviewed by people.
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Brasilia - The prices of petrol, gas canisters and fixed rate to be flat this year , according to projections by the Monetary Policy Committee ( Monetary Policy Committee ) of the Central Bank (CB ) . Have a forecast increase in residential electricity tariff for the cumulative 2014 is 7.5 % , the same amount considered by Monetary Policy Committee in January. These estimates were published on Thursday in the minutes of the latest Monetary Policy Committee meeting , held on 25 and 26 February.
For the set of prices administered by contracts and monitored in 2014 , the projected increase of 4.5 % , which is considered by the Monetary Policy Committee was held in January . For 2015, the estimate of 4.5 % was also maintained . The BC makes these projections to assess the trend of inflation in the country , in the Monetary Policy Committee meeting , responsible for setting the benchmark interest rate , the Selic . This rate is used in trading government bonds in the Special System of Clearance and Custody ( Selic ) and serves as a benchmark for other interest rates in the economy .
When the Monetary Policy Committee increased the Selic , the goal is to contain the heated demand , and this has reflected in the price , because the higher interest rates become more expensive credit and stimulate savings. Already when the Monetary Policy Committee reduced the basic interest rate , the trend is that credit is getting cheaper , encouraging the production and consumption , and the extent alleviates control over inflation .
The BC must find balance when making decisions about the basic interest rate in order to make inflation is within the target set by the National Monetary Council . This target is centered 4.5 % , and a margin of 2 percentage points more or less.
Effects of higher interest rates slow to appear
The effects of increasing the basic interest rate , the Selic , accumulate and take time to appear , according to review of the Monetary Policy Committee ( Monetary Policy Committee ) of the Central Bank (CB ) . On Thursday , the Fed released the minutes of last week's committee meeting , when it decided to raise the Selic rate by 0.25 percentage point to 10.75 % per annum . At the February meeting , the Committee reduced the pace of adjustments that before had been 0.5 percentage point .
This rate is used in trading government bonds in the Special System of Clearance and Custody ( Selic ) and serves as a benchmark for other interest rates in the economy . When the Monetary Policy Committee ( Monetary Policy Committee ) increases the Selic , the goal is to contain the heated demand , and this has reflected in the price , because the higher interest rates become more expensive credit and stimulate savings. Already when the Monetary Policy Committee reduced the basic interest rate , the trend is that credit is getting cheaper , encouraging the production and consumption , and the extent alleviates control over inflation .
The BC must find balance when making decisions about the basic interest rate in order to make inflation is within the target set by the National Monetary Council . This target is centered 4.5 % , and a margin of two percentage points more or less.
In minutes released on Thursday , the Committee says it understood to be " appropriate " to continue adjusting the Selic . That's because , for the Monetary Policy Committee , although there is some moderation , the high variation in consumer price in the last 12 months , contributing to inflation still show resistance. The Central Bank also reinforced that inflation " has proved slightly above what was anticipated ."
In this scenario , the Fed also highlights " the formal and informal indexation mechanisms and the perception of economic agents on the dynamics of inflation." "Given the damage it would cause the persistence of this process for decisions on consumption and investment , in the view of the committee , it is necessary that , with proper timing , the same is reversed ," said the minutes .
Thus , the Committee believes that , " in times like the present ," must remain " vigilant so as to minimize the risk that high inflation levels , as observed in the last 12 months , persist in the horizon relevant for monetary policy " . " At the same time , the Committee considers that the effects of monetary policy actions on inflation are cumulative and manifest themselves with lags
Source : The Day
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This article was translated by an automatic translation system, and was therefore not reviewed by people.