Brazil Central Bank: lower benchmark interest rate to boost growth

The reduction in the SELIC, Brazil's benchmark interest rate, should contribute to the recovery of economic growth in the country, said Central Bank President Ilan Goldfajn during a hearing of the Commission for Economic Affairs at the Senate today (Apr. 4).

“We'll continue working on behalf of the Central Bank with tenacity and serenity. We're certain that, in addition to other efforts by the government, a flexible monetary policy will contribute to the recovery of growth.   The more we persevere in the reforms and adjustments, the quickest the economic recovery, with the generation of employment and revenue for Brazilians,” he said.

Goldfajn went on to say it was important to bring forecasts for the inflation towards the target so that interest can be slashed. “This evidence also corroborates the need for a monetary policy first to anchor inflation projections, later to bring about monetary flexibility—and not the other way around, with doubtful results,” he highlighted.

Inflation goal

The target for the inflation is 4.5%, with a lower limit of 3% and an upper limit of 6%. During the hearing, Goldfajn noted that the market's expectation for the inflation at the end of 2017 stands at 4.1%, compared to 4.5% for next year.

Translated by Fabrício Ferreira