06/27/2024 – 13:43
SAO PAULO (Reuters) – A possible interest rate hike is not in the central bank’s baseline scenario, the bank’s president, Roberto Campos Neto, said on Thursday, emphasizing that the monetary authority’s recent communications have sought not to present future guidance for the Selic rate.
In an interview to comment on the Inflation Report, in São Paulo, Campos Neto highlighted that the BC is monitoring the scenario and remains vigilant.
“Regarding rising interest rates, it is not our base scenario, we understand that the language adopted is compatible with not having given ‘guidance’ for the future at this time”, he stated.
After the Secretary of the National Treasury, Rogério Ceron, stated this week that the market’s perception of the fiscal situation is not deteriorating, Campos Neto said in the interview that there is a perception among analysts of a worsening in public accounts.
Campos Neto and the Central Bank’s Director of Economic Policy, Diogo Guillen, who was also present at the press conference, were also asked about the Central Bank’s alternative scenario, which considers a stable Selic rate at 10.50% throughout the relevant horizon. In this scenario, the inflation projection for 2025 is 3.1% — already close to the center of the target for the year, of 3%.
In the market, one of the interpretations is that, according to the alternative scenario, inflation in 2026 would already be at the center or below the center of the target, which would open space, at some point in 2025, for the BC to cut the Selic rate again.
Guillen avoided mentioning, in his response, what the projection is in the alternative scenario for inflation in 2026, but during his speech he stated that the BC is very comfortable with the numbers in its scenarios.
(By Fabrício de Castro and Bernardo Caram)
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