BRASILIA (Reuters) – Brazil’s central bank governor said on Thursday that the bar for accelerating interest rate cuts is a little higher now, signaling policymakers have been following recent developments in the international scenario with more concern.
“I would say the bar is perhaps slightly higher, yes,” Roberto Campos Neto noted at a press conference.
After the central bank last week cut its benchmark rate by another 50 basis points to 12.75% and signaled more of the same in upcoming meetings, Campos Neto highlighted that its monetary policy stance still needs to remain restrictive.
He stressed the central bank was in no way comfortable with inflation still running above its targets, emphasizing that policymakers always pursue the official inflation goal, which is 3.0% from 2024 on.
Regarding the size of the monetary easing cycle, he refrained from signaling how far rates would fall.
“We are in a time of great uncertainty, including abroad,” he said. “There is no gain in indicating the size of the cutting cycle at this time.”
Campos Neto also said it is too early to talk about narrower rate cuts at the moment.
His remarks echoed comments made earlier in the day by the bank’s monetary policy director, Gabriel Galipolo, who defended 50-basis-point cuts and highlighted policymakers’ concerns about interest rates in the U.S. and recent developments in China.
The central bank chief also highlighted attention towards Chinese market interventions and a change in the growth profile of the Asian powerhouse migrating to consumption and innovation, rather than infrastructure.
(Reporting by Marcela Ayres; editing by Jonathan Oatis and Chris Reese)
