MNI BRIEF: BCB To Stay Restrictive For Longer Period-Galipolo

Central Bank of Brazil governor Gabriel Galipolo said Monday that it makes sense to keep interest rates at a restrictive level "for a longer period than is typically the case." Its official Selic rate is at 14.75% after a 50-basis-point hike two weeks ago. 

"We’ve been emphasizing that, given unanchored expectations, the current scenario, and even recent historical experience, it makes sense for us to keep interest rates at a restrictive level for a longer period than is typically the case," Galipolo said at an event sponsored by Goldman Sachs in São Paulo.

He emphasized that the BCB is focusing on communicating how it will react, rather than on what it is going to do, given the high level of uncertainty.

"I believe we’ve tried to leave no doubt about our reaction function, how we will respond, and our commitment to the inflation target and to monetary stability based on the actions we’ve taken." (See - MNI INTERVIEW: Lack Of BCB Guidance Doesn't Mean End Of Cycle)