The president of the Central Bank (BC), Roberto Campos Neto, reiterated this Sunday, 27, the message that the monetary tightening cycle will end in May, with the Selic rate at 12.75% per year. During an interview with the program Free Channelfrom Band, he left, however, the door open for the BC to reverse the assessment, and continue raising interest rates at the next meeting of the Monetary Policy Committee (Copom), in case of an escalation of the war in Ukraine.
“If there is an impact of the war, we can change. But we understand that 12.75% would be a rate capable of bringing inflation to the target in the relevant horizon (of monetary policy)”, maintained Campos Neto.
When commenting on market forecasts that point to inflation above the central target next year, the BC president considered that economists’ forecasts change all the time. He reaffirmed the expectation that inflation will peak in April – 11% in 12 months – and then begin to subside. “But obviously we are in an environment of high uncertainty”, pondered Campos Neto, without ruling out possible shocks, especially resulting from the crisis in Eastern Europe.
According to Campos Neto, the jump in the price of energy commodities, such as oil, will at some point produce a reverse shock, of economic deceleration, with a consequent rebalancing of global inflation. “Rebalancing can come with less energy consumption and less growth,” he said.
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