FT: Brazil "threw the inflation target out the window"
The British Financial Times reports that there is political pressure to lower the benchmark interest rate, despite the fact that members of the Copom (Monetary Policy Committee) understand that this is not the most efficient policy. "If this happens, the inflation target (between 2,5% and 6,5%) will truly be thrown out the window."
247 The international press's flirtation with the Brazilian economy has definitely soured. After The Economist ask for the head Minister Guido Mantega and the Financial Times criticize the "jeitinho" Given the information provided by the federal government's economic team, the Financial Times returned to the attack: "Brazil: inflation target thrown to the winds," reads the title of the critical article.
Once again, the review was published on the blog. Beyond BRICSReferring to the Central Bank's Focus report, the publication states that economists are increasingly raising their expectations for 2013 inflation – from 5,53% to 5,65% in the latest report. According to the British newspaper, we are living through "increasingly difficult times" for the country's monetary and fiscal policymakers: "as long as the economy remains stagnant, inflation will persistently rise."
The blog highlights that Brazilian investors do not believe the Central Bank will be able to stimulate the economy without inflationary costs and argues that future interest rate contracts from 2012 to 2015 are at higher prices, indicating an expectation of an increase in the Selic rate. However, there is political pressure for the basic interest rate to fall, despite the members of the Monetary Policy Committee (Copom) understanding that this should not be the most efficient policy. "If this happens, the inflation target (between 2,5% and 6,5%) will truly be thrown out the window," the text says.Read the full text in English.).