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12/11/2014
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Inflation should go to only 4.5% in 2016, evaluated institution in the Monetary Policy Committee minutes.
Evaluation of the BC must remain 'vigilant' was maintained.
Alexandro Martello
G1, in Brasilia
The Monetary Policy Committee (Copom) of the Central Bank said on Thursday (11) by means of the minutes of the last meeting, when accelerated the pace of rising interest rates by raising the base rate of the economy to 11.75% per year , that inflation is likely to remain high in 2015, but assessed that "even next year enters long period of decline." The monetary authority added that the convergence of inflation to the target path (whose central value is 4.5%) tends to occur in 2016.
"The Monetary Policy Committee points out that, in times like the present, monetary policy [definition of interest to curb inflation] must remain vigilant in order to minimize risks that high levels of inflation, as observed in the last twelve months, persist in the relevant horizon for monetary policy [by the end of 2016], "the Central Bank, the Monetary Policy Committee minutes.
The monetary authority added, however, that considering the "cumulative and lagged effects of monetary policy" [high interest already implemented yet], the "additional effort of monetary policy [next increases in interest] tends to be deployed sparingly" .
GDP patina, but inflation remains high
The acceleration of increased interest, conducted last week by the Central Bank, was in a stagnation of the Brazilian economy, but still sturdy inflation. The Gross Domestic Product (GDP) increased only 0.2% from January to September this year. In the third quarter, the Brazilian economy came out of technical recession recorded in the first half of the year, but with an increase of only 0.1% in GDP.
At the same time, the Consumer Price Index (IPCA), the official inflation rate, amounted to 6.56% in the twelve months to November - completing four months above the ceiling of 6.5% of the Brazilian inflation targeting system . The goal, however, is only for closed years. The market and the Ministry of Finance believe that inflation will be below the 6.5% ceiling this year.
"For the Committee, the fact that inflation currently is in high levels reflects, in part, the occurrence of two important processes of relative price adjustments in the economy - realignment of domestic prices for international [high dollar] and realignment administered prices in relation to free [tariff increase, as energy and gasoline, for example]. the Committee considers that, since the last meeting, among other factors, the intensification of these relative price adjustments in the economy has made the balance risks to less favorable inflation, "the Monetary Policy Committee on Thursday.
Next steps in the interest of BC
To raise interest rates last week, the Central Bank had already informed that the next increases the Selic rate would be made to "thrift" as was reafirmardo in the minutes of the meeting - released today. The financial market already provides, therefore, a slowdown in the rate of discharge from the base rate of the economy, to 0.25 percentage point in January - to 12% per year.
It remains, however, the question of what the cycle the size of high interest rates, that is, how many elevations will be made by the monetary authority. Until last week, the expectation of economists of the banks was that the monetary authority would promote more three consecutive increases of 0.25 percentage point - up to 12.50% a year - in April 2015.
The Copom also assessed that aggregate demand tends to have relatively robust over the horizon relevant for monetary policy, ie until the end of 2016.
"On the one hand, household consumption tends to record moderate pace of expansion, due to effects of stimulus factors such as income growth and moderate credit expansion, on the other, relatively favorable financial conditions, provision of public services, expansion the areas of oil exploration, among others, tend to favor the expansion of investments. in turn, exports tend to be benefited by the higher growth scenario major trading partners and the depreciation of the real, "he said.
According to the monetary authority, cited these elements as well as "developments within quasi-fiscal" (primary surplus made by the public sector) and in the asset market (price of the dollar, for example), are "important parts of the context in which future decisions monetary policy will be taken, in order to ensure the convergence of inflation to the target path, which, in the Committee's view, tends to occur in 2016 ".
Source: G1
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This article was translated by an automatic translation system, and was therefore not reviewed by people.