The tightening of monetary policy in other countries has an impact on the exchange rate in the short term, but is deflationary for Brazil in the medium term, said this Thursday (10) the director of Economic Policy at the Central Bank, Diogo Guillen.
In an event promoted by Itaú Asset Management, Guillen argued that, despite the exchange rate effect (high interest rates in the United States, for example, tend to appreciate the dollar and make products imported by Brazil more expensive), the monetary tightening abroad opens the global gap of the product – space that the activity has to grow without putting pressure on prices, considering the installed production capacity.
In the presentation, the director stated that the transmission mechanisms of monetary policy in Brazil are operating as expected, arguing that the BC already observes a change in the mix of credit concessions. After saying that there is an impact on sectors that are more sensitive to credit, he cited as an example vehicle financing, which already show reflections of the tightening of interest rates.
An analysis of the BC, according to him, shows that the volume of credit is developing as expected for concessions to individuals, but is still “a little stronger” in financing to companies.
Guillen mentioned that there is uncertainty regarding the variables that make up the output gap in Brazil. One of these items is the behavior of the labor market, which the BC has “watched a lot”, according to him, noting that the level of wages is low, but rising above inflation.
The director stated that it is difficult to measure the level of unemployment in the country that does not put pressure on inflation.
“There is this debate because of the labor reform, has it changed? We are seeing the unemployment rate falling, but will it already generate inflation? What is that level?” she said.
Source: CNN Brasil

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