MNI BRIEF:BCB Aims For Further Monetary Normalization-Galipolo

The Central Bank of Brazil's governor Gabriel Galipolo said Tuesday the board is aiming for a "normalization" of monetary policy in the coming years so that interest rate policy gains potency and can achieve its goals at levels more in line with peer countries.

"When I look across different types of economic activity indicators, it suggests to us that perhaps the transmission mechanisms of monetary policy in Brazil don't function as smoothly as we see in other countries," Galipolo said during a public session at the Federal Senate.

"There may be some clogged channels in monetary policy, which ends up requiring higher doses of the medicine to achieve the same effect. Naturally, it’s desirable for Brazil to normalize its monetary policy so that we can have an interest rate level more in line with our peers," he added.

The BCB’s Copom committee raised the Selic rate by 100 basis points last month to 14.25%, while signaling a smaller increase at its next meeting in May. (See MNI INTERVIEW: BCB Might Cut Sooner as Activity Slows - Serra)