MNI BRIEF: 68% Chance of Exceeding 2025 Inflation Target - BCB

The Central Bank of Brazil sees a 68% chance of inflation exceeding the upper limit of its target tolerance range in 2025, according to its second quarter Monetary Policy Report released Thursday, down from a 70% probability in its first quarter report.

The probability of exceeding the target for 2026 stood at 26%.

"Considering the monthly projections, twelve-month accumulated inflation exceeds the upper bound of the target tolerance range for six consecutive months as of June this year. Should this scenario materialize, it will constitute a breach of the inflation target, requiring the publication of the reasons for this breach in a note within this report and in an open letter to the Finance Ministry", the document said.

The goal is 3% with a tolerance range of 1.5 points of percentage up or down. The inflation forecast for 2025 by monetary policy committee Copom decreased for 4.9% in the baseline scenario from 5.1% in the last report. (See MNI INTERVIEW: BCB To Hold Rates At 15% Until Next Year- Velho)