Brazil's Central Bank Aims For Inflation 'Around' 3.25% Target In 2023

• Brazil's central bank is aiming for inflation in 2023 "around" the 3.25% target but less than 4%, its chief, Roberto Campos Neto, said on June 23^rd, as policymakers hike interest rates to cool surging consumer prices in Latin America's largest economy. 
• The Central Bank raised its key interest rate to 13.25% last week and penciled in another hike for August, as a measure to ensure inflation next year converged "around the target" rather than "to its target." 
• Campos Neto also reiterated the central bank's guidance that interest rates would rise and stay in significantly contractionary territory for longer to fight inflation. Consumer prices grew at an 11.7% rate in the 12 months through May, as such the strategy is necessary because of the uncertainty marking Brazil's inflation path. 
• Despite government proposals to lower fuel prices, Campos Neto said policymakers have not seen a relevant change in the balance of risks for inflation, which he indicated were still not tilted to the upside. However, on a more positive note, the central bank lifted its economic growth outlook for 2022 to 1.7% from 1%, on the back of a stronger-than-expected performance in the first quarter.

 

(Source: Reuters)