Folha praises Ilan's crackdown on inflation.
"Aiming for the center of the target will be fundamental to lowering inflation expectations and enabling lower and sustainable interest rates in the medium term. The Central Bank's attitude reflects an attempt to restore credibility," says an editorial by Otávio Frias Filho in Folha de S.Paulo, published this Wednesday, regarding Ilan Goldfajn's decision to target the center of the target as early as 2017, a decision that contributed to the fall of the dollar.
247 - The sharp drop in the dollar yesterday, which reached its lowest value in a year, was the result of the decision by the new president of the Central Bank, Ilan Goldfajn, to aim for the center of the 4,5% target as early as 2017, even at the cost of maintaining high interest rates.
The decision was praised in Wednesday's editorial. ambitious BC, from Folha de S. Paulo. "There were basically two paths: postpone until 2018 the commitment to bring inflation to the center of the target (4,5%), in order to reduce the basic interest rate very soon, or postpone the cuts in the Selic rate, with a view to achieving price convergence as early as next year," the text says.
"The president of the Central Bank, Ilan Goldfajn, opted for the second way—in his words, an ambitious but credible objective." Targeting the center of the inflation target will be crucial to lowering inflation expectations and enabling lower, sustainable interest rates in the medium term. The Central Bank's actions reflect an attempt to restore credibility.
The decision results in the postponement of interest rate cuts. "All things considered, it is most likely that the Selic rate will begin to be reduced towards the end of the year, as is necessary. Despite the risks, a combination of factors is emerging that, with some luck, could lead to interest rates falling to single digits in the medium term, in a sustainable way. This would be a significant change in the functioning of the economy."