Central Bank avoids "defining" the next interest rate adjustment to maintain freedom in its decision, says Galípolo.
The Central Bank president states that if there were certainty about the next move, the guidance would be in the minutes of the Copom meeting.
247 - The president of the Central Bank (BC), Gabriel Galípolo, highlighted this Thursday (27) that the monetary authority avoided precisely defining the next adjustment of the interest rate in order to preserve the decision-making freedom of the Monetary Policy Committee (Copom). The statements were made during the release of the first Monetary Policy Report of the year, which revised the GDP growth projection for 2025 from 2,1% to 1,9%, highlights the CNN Money.
“If we had that conviction [regarding the guidance], we would have written it [in the minutes],” said Galípolo, in response to questions about the Copom's next move. In the March minutes, the committee signaled that it should implement another rate hike in May, but of a smaller magnitude. The president reinforced that the adjustment cycle still needs to continue, but cautiously: “We understand that the cycle needs to be extended. However, due to the uncertainties, it needs to be extended to a lesser extent. The intention is to preserve the degree of freedom so that we can gather the data.”
Inflation and risks: The report also raised the probability of inflation exceeding the upper limit of the target in 2024 from 50% to 70%, which is 4,5% (with a tolerance range of 1,5 percentage points above or below). The revision reflects the persistent challenges in controlling prices, even with restrictive monetary policy.
Galípolo avoided speculating about the next steps, reiterating that the Central Bank prioritizes the continuous analysis of economic data before making decisions. "That's why we didn't give any definitive guidance on what we could or couldn't do," he concluded.
