Government commits to lower inflation
The government resolution setting the core of the inflation target for 2017 at 4.5% and narrowing the target range from plus or minus 2 percentage points to 1.5 percentage points was published Monday (June 29). With the change, approved by the National Monetary Council (CMN) on June 25, the upper target has been lowered to 6%.
The government sets the inflation target based on the National Consumer Price Index (IPCA). The target range had remained stable since 2004, when the government narrowed it from plus or minus 2.5 to 2 percentage points for 2006.
The Central Bank has a responsibility to meet the inflation target using the available monetary policy tools, such as the key interest rate and the banks' compulsory deposits with the Central Bank as a measure to reduce currency in circulation and demand deposits (the money supply).
The CMN is composed of the Ministers of Finance and Planning and the Central Bank chairman.
Translated by Mayra Borges
Fonte: Government commits to lower inflation
