Galípolo says the Central Bank is "quite bothered" by inflation being outside the target range.
Central Bank President reinforces tight monetary policy.
247 - The president of the Central Bank, Gabriel Galípolo, stated this Thursday (23) that the institution is “quite bothered” by the fact that inflation and market expectations remain above the target. Despite this, he highlighted that the country is experiencing an accelerated process of disinflation and defended maintaining monetary policy at a restrictive level for a prolonged period.
The statements were made during his participation in the Indonesia-Brazil Economic Forum in Jakarta and reported by Reuters. Galípolo emphasized that the Central Bank has been acting diligently and promptly in combating inflationary pressures. "Inflation and expectations remain outside the target, which is a point of considerable concern for the Central Bank, but we are talking about inflation that is in a process of reduction and returning to the target," he stated.
Although he reinforced the monetary authority's commitment to the 3% target, with a margin of 1,5 percentage points, Galípolo avoided making predictions about when the official price index will reach the target. According to the most recent Focus survey, the IPCA (Brazilian consumer price index) is expected to end 2025 with an increase of 4,70%, with no expectation of convergence to the center of the target until 2028.
In September, the IPCA (Brazilian consumer price index) rose 0,48%, accumulating a 5,17% increase over 12 months. Given this scenario, the Central Bank decided to maintain the benchmark interest rate (Selic) at 15% and indicated its intention to keep it at this level for "a fairly long period".
According to Galípolo, this stance is essential to ensure inflation convergence without compromising economic growth and employment levels. "The Brazilian economy has been going through a cycle of continuous growth... and yet, although inflation is outside the target, it demands that the Central Bank maintain interest rates at a high and restrictive level for a prolonged period," he explained.
