The Central Bank of Brazil maintained the basic interest rate at 10.50% per year, in line with the decision taken at the June meeting, when it interrupted a series of seven consecutive cuts, despite criticism from the Brazilian President.
The Central Bank made the decision unanimously and cited in a statement an “adverse” external scenario, marked by “uncertainty” surrounding the monetary policy of the US Federal Reserve, which on Wednesday kept the interest rate stable, but showed itself open to cuts in the near future.
In the domestic scenario, the institution pointed to greater than expected economic dynamism and inflation that has slowed down in recent months.
Its inflation projections for 2024 and 2025 are 4.1% and 4%, respectively.
Regarding the Brazilian Government’s budgetary policy, the central bank stressed the importance of it being “credible” and “committed” to debt sustainability, in order to contribute to price stabilization.
For the next meetings, the institution’s management warned that monetary policy should follow a similar line.
After the Central Bank decided in June not to lower interest rates, Brazilian President Lula da Silva attacked the director of the monetary institution, Roberto Campos Neto, who he accused of being a “political adversary”.
In addition, the Brazilian president said that Campos Neto’s replacement, whose term ends at the end of this year, will normalize the economy, whose modest growth Lula da Silva attributes to high interest rates.
Source: www.jornaldenegocios.pt
