08/13/2024 – 22:31
The Director of Economic Policy at the Central Bank (BC), Diogo Guillen, reinforced this Tuesday, the 13th, that the role of the agency is to re-anchor expectations, safeguarding the credibility of the institution. According to him, the process of re-anchoring expectations is very important to reduce the cost of disinflation.
“Unanchored expectations increase costs a lot, and bringing inflation to the target has a much greater impact on activity. So, it is our role, this is part of our mission, to re-anchor these expectations, safeguarding credibility to be able to re-anchor expectations,” he said during a lecture he gave at the Broadcast Awards: Analysts, Companies, Projections event, tonight in São Paulo.
The movement in expectations, according to Guillen, led to the first discussion about the target. Now, with the decree of the continuous target, he says he thinks that ends any debate about it. “The decree that defines a continuous target of 3% that cannot change with less than 36 months in advance. So I think it brings a lot of security to the regime, which is very important,” he said.
The director also noted that not only have expectations increased, but also the risk premium and that “we have to combat this”. “The greater unanchoring brings discomfort and we have to act to combat this”, he reinforced.
#Guillen #role #reanchor #expectations #safeguarding #credibility