MNI BRIEF: BCB Rates Restrictive Amid High Inflation-Galipolo

Central Bank of Brazil Governor Gabriel Galipolo said Wednesday it is clear why the board has to keep interest rates restrictive, as inflation has remained above the 3% target for 11 months and expectations are no longer anchored.

“We’ve been outside the target for 11 months. Not in a single one of those months have we been within it. All projections indicate that inflation will remain above the target for a large part of my term,” Galipolo said at a press conference in São Paulo when asked about government criticism of the high interest rate policy.

“It’s quite clear why we’re keeping interest rates at a restrictive level and why we believe it’s necessary to stay that way,” he added.

He also emphasized that, in an environment of high uncertainty, the central bank strives to be factual, data-dependent, and transparent.

The BCB held its interest rate at 15.00% last week. (See MNI BCB WATCH: Keeping 15.00% Rate For Longer Will Be Enough)