Official rate was 4.62% in 2023, within the allowed range of 1.75% to 4.75%; last time was in 2020
Inflation returned to within the range allowed by the target after 3 years. It closed 2023 at 4.62%. The last time the IPCA (Broad National Consumer Price Index) was within the permitted limits was in 2020, when it was 4.52%.
The inflation target is defined by CMN (National Monetary Council), which is composed of the president of the B.C. (Central Bank), Roberto Campos Neto, and the Finance Ministers, Fernando Haddadand Planning and Budget, Simone Tebet.
It is the Central Bank's responsibility to control inflation. Therefore, when the rate falls outside the permitted range, the monetary authority must send a public letter to the Ministry of Finance with explanations. Under Campos Neto, the BC released two: in 2021 and in 2022.
The target center has been progressively falling since 2018, when it was 4.5%. It falls by 0.25 percentage points annually.
HISTORY OF LETTERS
The current president of B.C. He was the 5th head of the Brazilian monetary authority to have to explain why the inflation target was not met. Armínio Fraga, Henrique Meirelles, Alexandre Tombini and Ilan Goldfajn also had to send a document to the Ministry of Economy with justifications.
The limits established for inflation targets have already been breached on 5 other occasions. Here are the cards already made:
- 2001 (letter made in January 2002 about 2001 inflation);
- 2002 (letter made in January 2003 about 2002 inflation);
- 2003 (letter made in February 2004 about 2003 inflation);
- 2015 (letter made in January 2016 about 2015 inflation);
- 2017 (letter made in January 2018 about 2017 inflation);
- 2021 (letter made in January 2022 regarding 2021 inflation);
- 2022 (letter made in January 2023 regarding 2022 inflation).
The inflation targeting regime was created in 1999 in the country. The monetary authority adopts the necessary measures to achieve the determined index, such as changing the basic interest rate, the Selic. The target has a tolerance range, currently 1.5 percentage points. Access here The historic.
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