Latest news with #GabrielGalipolo
Reuters
21-07-2025
- Business
- Reuters
Brazil economists trim 2026 inflation forecast in boost for central bank
SAO PAULO, July 21 (Reuters) - Private economists polled weekly by Brazil's central bank trimmed their 2026 inflation outlook for the first time in over two months, according to a survey released on Monday, in a welcome development for the central bank. Consumer prices in 2026 are now expected to rise 4.45%, down from 4.50% the previous week, a projection that had remained unchanged for nine straight weeks. The central bank targets inflation at 3% with a tolerance range of plus or minus 1.5 percentage points. Central bank officials have expressed concern that long-term inflation expectations may be becoming unanchored, despite the country's main interest rate standing at a restrictive 15%. Economists' forecasts for inflation held steady at 4% for 2027 and dipped slightly to 3.80% from 3.81% for 2028, the survey showed. Inflation projections for this year have been on a steady decline, supported by a stronger exchange rate. They continued that trend this week, easing to 5.10% from 5.17% previously. Central bank chief Gabriel Galipolo said in a letter earlier this month that inflation is expected to return to within the tolerance band by the end of the first quarter of 2026. Estimates for Brazil's benchmark interest rate remained unchanged from the previous week, at 15% for 2025 and 12.5% for 2026. The following is a set of projections from the survey:
Reuters
10-07-2025
- Business
- Reuters
Brazil's monthly inflation slows, annual rate remains above target
SAO PAULO, July 10 (Reuters) - Brazil's monthly inflation slowed for the fourth time in a row in June, but the annual rate ticked up and remained well above the official goal, data showed on Thursday, prompting the central bank to release a letter to justify missing the target. Consumer prices as measured by the benchmark IPCA index rose 0.24% in June, government statistics agency IBGE said, down from the 0.26% increase reported in the previous month but above the 0.20% rise expected by economists polled by Reuters. Prices were up 5.35% in the 12 months through June, IBGE added, exceeding the 5.32% registered in May. Economists had also expected the June rate to come in at 5.32%. Brazil's central bank has an inflation target of 3%, plus or minus a margin of 1.5 percentage points, known as a "tolerance interval", which was exceeded for the ninth consecutive month. Central bank governor Gabriel Galipolo released an open letter to the country's monetary council later in the day to justify missing the target, as per Brazilian rules. Galipolo reaffirmed that the bank is committed to bringing the rate back to the goal after policymakers last month hiked interest rates to 15%, the highest since July 2006, and signaled they would keep them steady for a prolonged period. "The central bank has taken the necessary steps to ensure that inflation returns to the range defined for the tolerance interval and reaches the inflation target of 3.00%," he wrote. In the letter, Galipolo added the central bank expects the accumulated inflation rate over 12 months to return to the tolerance interval from the end of the first quarter of 2026. "There's little in the Brazilian June CPI print that changes our view that last month's hike marked the end to Copom's tightening cycle," Capital Economics emerging markets economist Kimberley Sperrfechter said. "But a lot will now depend on how the trade dispute with the U.S. plays out and what happens to the real."
Reuters
30-06-2025
- Business
- Reuters
Brazilian economists expect central bank to cut rates in early 2026 despite hawkish signals
BRASILIA, June 30 (Reuters) - Brazilian private economists still expect the central bank to start cutting interest rates next January, even after policymakers reinforced guidance that borrowing costs will remain steady for a "very prolonged" period to anchor inflation to target, according to a survey released on Monday. The central bank's weekly survey shows economists project the benchmark Selic rate to be held at 15% through December, before falling to 14.75% in January. Policymakers earlier this month raised the Selic rate by 25 basis points to its current level, bringing the total amount of tightening to 450 basis points since September, and signalled a pause at the next meeting in late July. Following the hike, the median forecast in the survey shifted to a 25-basis-point cut in January, with the Selic rate projected to end 2026 at 12.50%. That outlook remained unchanged on Monday. Diogo Guillen, the central bank's economic policy director, emphasized on Friday that policymakers view any rate-cut debate as premature. The latest survey also showed that the expected inflation rate for 2025 was cut for a fifth straight week to 5.20%, but projections for subsequent years remain unchanged above the 3% official target, which has a 1.5-point tolerance range either side. In recent speeches, central bank Governor Gabriel Galipolo and Guillen reiterated policymakers' commitment to bringing inflation to the 3% target over the "relevant horizon" - the 18-month period influenced by current policy decisions. Policymakers have flagged a rate pause despite projecting inflation to be 3.6% over that horizon. That forecast was based on market expectations that the Selic rate would be held steady at 14.75% until January 2026 - a more dovish path than has materialized. Galipolo and Guillen added that inflation is still expected to converge to the central bank's target under alternative, undisclosed rate paths.
Reuters
26-06-2025
- Business
- Reuters
Brazil central bank stands by inflation target despite forecast gap
BRASILIA, June 26 (Reuters) - Brazil's central bank remains "absolutely" committed to pursuing its 3% inflation target, its governor said on Thursday, despite the bank having signaled it will hold rates even as projections show inflation staying above the goal through 2027. Speaking at a press conference, Gabriel Galipolo said the central bank's projections take into account the expected interest rate path reflected in the median estimates from private economists in the Focus survey its conducts weekly. However, he emphasized that this path does not necessarily represent the rate trajectory the bank will follow. "There are several paths to reach the center of the target," he said. "We are absolutely committed to it." Last week the central bank raised its benchmark interest rate by 25 basis points to 15%, a near two-decade high, and signaled a "very prolonged pause" in its efforts to tame consumer prices. In their policy statement, policymakers had also emphasized they would not hesitate to resume rate hikes if needed. Galipolo said on Thursday the monetary authority would assess a broad set of indicators, rather than any single metric, when evaluating whether to opt for a new rate increase. Earlier in the day, the central bank's quarterly monetary policy report projected annual inflation at 3.2% by the end of 2027, still above the 3% target, which has a tolerance band of 1.5 percentage points in either direction. For the fourth quarter of 2026, the relevant horizon for current policy decisions, annual inflation is seen at 3.6%. In the same press conference, economic policy director Diego Guillen stressed that the central bank was not extending the horizon to meet its inflation target. Galipolo also said that this week's foreign-exchange interventions were aimed at addressing a specific issue related to coupons, and did not signal any change in the bank's currency policy.
Bloomberg
24-06-2025
- Business
- Bloomberg
Brazil Central Bank Says Impact of Higher Rates Is Still to Come
Brazil's central bank said it will pause its interest rate hiking cycle to observe the effects of tighter monetary policy on above-target inflation, emphasizing that a great part of the impact is still to come. The tightening cycle undertaken so far was particularly quick and very firm, board members led by Gabriel Galipolo wrote in the minutes to their June 18 decision, when they lifted the benchmark Selic by a quarter-point to 15%.
