RIO DE JANEIRO, BRAZIL – “We managed to break the dynamics of high interest rates in Brazil when we managed to show the market that we were on the path to fiscal convergence. So I think it’s very much about the fiscal aspect,” Campos Neto said, in an appearance at the International Monetary Fund (IMF) Spring Meeting with the World Bank, recorded on April 1st.
Again, he argued that the recent rise in inflation in Brazil is due to the growth in international commodity prices, while the real has depreciated against the dollar.
“Actually, the local price of commodities has risen a lot. In the case of food items, such as soybeans and corn, with the increase in Asian demand, especially in China and India. In the case of metals, there are recovery programs in several countries. And in relation to oil, there is the effect of the expectation of greater global growth,” he repeated.
Campos Neto also reconnected the emergency aid – closed in December last year and resumed as of this Tuesday, April 6 – to the high prices of consumer goods. “We transferred a high amount of money that became consumption. The products in the basket of people who received the aid had a higher price increase,” he said.
Roberto Campos Neto once again classified inflationary shocks in Brazil as temporary, but reaffirmed that the monetary authority already sees the contamination of other inflationary nuclei and, for this reason, has initiated the current cycle of high interest rates.
Source: Isto É Dinheiro