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Brazil's central bank warns of short-term inflationary pressures

Xinhua News,BRASILIA
2020-09-23 05:05

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BRASILIA, Sept. 22 (Xinhua) -- The Central Bank of Brazil's Monetary Policy Committee (Copom) on Tuesday warned of short-term inflationary pressures on the economy, although the inflation outlook remains under control.

"Long-term inflation expectations remain anchored," according to the minutes of Copom's meeting last week, which were released on Tuesday.

However, a temporary increase in inflation is expected due to the rise in food prices and the gradual normalization of activities in the wake of the COVID-19 pandemic and lockdown, the committee said.

The Copom decided last week to maintain the benchmark interest rate at 2 percent annually, its lowest level on record, a move that interrupted a cycle of successive cuts since July of last year.

Brazil's financial market expects the bank to keep the rate unchanged at least until the end of the year.

Regarding the world economy, the committee estimated that the restart of activities in the main economies has led to a more favorable environment for emerging economies, such as Brazil.

But there is "considerable uncertainty about the evolution of this benign scenario," the committee added.
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