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The Central Bank has put in place a favorable framework for inflation, which suggests a possible tightening of interest after failing to mention this possibility in its communications, but warned that rising risks weighing on the IPCA remain important on his radar (19659002) The alert was launched in the minutes of last week's meeting of the Committee on Monetary Policy (Copom), in which he stressed that these risks rising, related to the risk of deterioration of the external scenario for emerging economies, "remain relevant and relevant."
"Thus, the members of the Copom concluded the persistence of the asymmetry in the balance of risks inflation ", said British Columbia
. According to Tendências economist Alessandra Ribeiro, the monetary authority sought to break a great euphoria compared to the Selic, after economists "British Columbia pointed out that the risk ratio is always asymmetrical in the negative sense of inflation. It has improved, but it still has an asymmetry, "she said, which is still expecting interest rates to rise by 7.75 percent from September onwards. 2019.
In the minutes, the CB reiterated that the current reading was favorable. "Inflation expectations are anchored, underlying inflation measures at appropriate or reasonable levels , projections showing inflation close to the targets of 2019 and 2020 and a high degree of inactivity in the economy – "
Last week, the central bank kept the key rate at its historic low of 6.5%, as widely expected by the market, and indicated that he saw a more favorable picture of inflation, thereby removing any mention of a possible rise in interest rates
In a Reuters poll, the 35 economists surveyed were already waiting for Seli c at this level, which took place for the sixth consecutive meeting of Copom. With the changes in tone adopted by the Central Bank, many have bet on a further delay in raising core interest rates, as slowing economic activity curbs inflation.
In September, British Columbia announced for the first time that it could increase. Selic, in the event of a deterioration in the inflation scenario, according to election uncertainties and a global risk aversion movement, has pushed the exchange rate to the highest level since the creation of Real.
Last week, however, retaining from his statement the phrase that he had adopted until then, according to which "the stimulus will begin to fade away if the prospective scenario of inflation at the horizon of monetary policy and / or its balance of risks deteriorates "
On another front, British Columbia has improved the perception of inflation, noting that it increased the risk of a high idle level to produce a pro trajectory. for inflation below expectations. At the same time, he noted that he was less likely to frustrate expectations regarding the continuity of economic reforms.
On the international scene, combined with the pressure risks for IPCA, the Central Bank of Brazil estimated in the minutes that it remained difficult, with the main risks badociated with the increase of aversion to the IPCA. risk factors in international markets, normalization of interest rates in some advanced economies and uncertainties in world trade.
In the future, the CB noted that all Copom members agreed that the current scenario "recommends maintaining greater flexibility to conduct monetary policy, which means refraining from to provide guidance on its next steps. "He stressed that these next steps would continue according to the evolution of economic activity, balance of risks and forecasts, as well as expectations of the future. 39; inflation.
"Copom members felt that prudence, serenity and perseverance in monetary policy decisions," The Committee understands that decisions based on these principles are a good guide for monetary policy, "the statement said. Central Bank in a message
Responding to the latest indications from British Columbia, economists who best meet the expectations of the Focus survey have begun to consider the Selic at 7% at the end of the year. next year, up from 7.25% in 2020. The rate will remain at 8%.
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