The president of the Central Bank, Roberto Campos Neto, clarified that the Monetary Policy Committee (Copom) is concentrating efforts to keep the 2023 inflation below 4%. According to him, this is what the BC wanted to communicate when it reported that the latest decision to raise the Selic to 13.25% is “compatible with the strategy of converging inflation around the target over the relevant horizon (2023)”.
Even so, the BC already admits expectations that the Extended Consumer Price Index (IPCA) for next year will be above the center of the target, which is 3.25% with a margin between 1.75% and 4.75% .
“I just want to make it clear that ‘around’ is less than 4%. We talk about a higher rate for a longer horizon in the same strategy as around the target. We understand that this is enough to achieve convergence. The volume of shocks and degree of uncertainty is so great that we understand this as the best way to make this statement ”, he said during a press conference on Thursday (23).
The director of Economic Policy at BC, Diogo Guillen, also highlighted the greater uncertainty than usual in the projections used. “We have emphasized that this uncertainty has increased in the last cycle and that is why we have adopted the ‘around’”.
Asked about the possibility of a change in the inflation targets already defined by the National Monetary Council (CMN), the BC president emphasized that the monetary authority has only one vote out of the three total in the body. He also evaluated such a strategy as ineffective.
“Modifying a short-term goal that is no longer on the relevant horizon doesn’t give you any credibility because you don’t have instruments that work on that horizon. Also modifying a very long goal, which today is very close to the goal, doesn’t seem to give you much credibility because the long goal is relatively close to the goal”, he argued.
The CMN meets this Thursday (23) to define the inflation target for 2025. The body must also reiterate or revise the targets for 2023 and 2024.
Source: CNN Brasil