Brazilian Central Bank says inflation should approach target by 2nd quarter of 2023
The Brazilian Central Bank’s Director of Monetary Policy, Bruno Serra Fernandes, said that official Brazilian inflation should approach the target value in the first or second quarter of 2023.
He said that the “post-pandemic” period had been affected by the consequences of the government’s response to the health crisis. “As it stands, it’s going to be a while,” he said.
Bruno Serra Fernandes participated in the 2022 Investment Strategies Forum, organized by Bradesco Asset Management.
Bruno Serra Fernandes explained that at the peak of 2020, the real had depreciated by 30% against other currencies, putting pressure on inflation at that time.
“At the turn of 2020 to 2021, we have seen a convergence, that is, inflation has converged with that of other countries in the case of food,” he explained. “We had the surge, and it was also reversed,” he added.
Brazil had three consecutive months of deflation.
According to the director, this was the sharpest decline in the IPCA (National Wide Consumer Price Index) since the post-crisis period of 2008, and he expects this to have an impact on reducing goods inflation.
He stated that the challenge of bringing inflation to target is still great.
Core inflation – which excludes temporary price effects – is still at 10%. Service inflation at 8% is also a concern for the central bank in controlling IPCA.
The Central Bank (BC) director explained that a “huge” global inflation shock in the world had not been recorded since the late 1970s. Latin America had an average inflation rate of 10%.
Brazil had a lower annual rate of 7.17% in September. The impact of inflation, in his opinion, was general.
He stated that countries needed to raise interest rates to control price index increases.
The Monetary Policy Committee (Copom) raised the key interest rate, the Selic, to 13.75% per year, the highest level since 2017.
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+0.21%
174,951.12
+0.21%
66,644.91
+0.53%
11,369.64
-0.71%
3,019,891
+0.36%
2,493.32
-0.60%
60,449.35
+0.24%
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 174,951.12 | +0.21% | +21.85% | 174,576.80 | 168,310 | 167,142 | — |
| USD/BRL | 5.16 | +0.01% | -5.13% | 5.16 | 5.18 | 5.14 | — |
| SELIC | 14.00% | — | — | — | — | — | |
| PETR4 | 41.64 | -0.05% | +35.19% | 41.66 | 41.97 | 41.15 | 41,499,400 |
| VALE3 | 72.97 | +0.83% | +30.75% | 72.37 | 73.54 | 72.66 | 17,658,000 |
| ITUB4 | 38.60 | -1.03% | +4.57% | 39.00 | 39.34 | 38.39 | 29,487,800 |
| BBDC4 | 16.85 | +0.36% | +3.50% | 16.79 | 16.90 | 16.67 | 19,416,900 |
| BBAS3 | 19.37 | +0.47% | +0.73% | 19.28 | 19.44 | 19.16 | 11,069,200 |
| B3SA3 | 14.26 | -0.21% | +12.73% | 14.29 | 14.47 | 14.11 | 33,037,800 |
| ABEV3 | 14.89 | -0.80% | +21.91% | 15.01 | 15.07 | 14.81 | 16,453,100 |
| WEGE3 | 47.59 | +0.49% | +29.99% | 47.36 | 48.08 | 47.36 | 3,364,600 |
| PRIO3 | 59.14 | -0.19% | +50.67% | 59.25 | 59.81 | 58.74 | 3,325,600 |
| SUZB3 | 41.33 | +2.35% | -23.55% | 40.38 | 41.48 | 40.35 | 3,914,900 |
| RENT3 | 34.68 | -0.09% | +0.84% | 34.71 | 34.96 | 34.35 | 7,979,100 |
| AZZA3 | 15.89 | -2.63% | -53.76% | 16.32 | 16.42 | 15.82 | 1,330,300 |
| CSNA3 | 4.30 | +0.47% | -42.65% | 4.28 | 4.41 | 4.26 | 10,076,100 |
| GGBR4 | 24.69 | +2.19% | +51.38% | 24.16 | 24.85 | 24.18 | 7,047,600 |
| ENEV3 | 24.21 | -1.38% | +70.49% | 24.55 | 24.64 | 23.99 | 9,297,000 |
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