BRASILIA (Reuters) – Brazil’s central bank will decide in August whether changes to the pace of monetary policy tightening are needed, but expects interest rates to rise 0.75 percentage points in June, a central bank official said on Friday. .
The bank’s director of monetary policy, Bruno Serra, added that the entity will adjust rates to ensure that inflation is located next year in the center of its target range, or 3.5%, within the framework of a seminar in online organized by Credit Suisse.
“So (in August) we will have the ability to decide if it will be necessary to reduce or if it will be necessary to maintain the ‘pace’ (rhythm), or if something else will be necessary,” said Serra.
The Central Bank raised the benchmark Selic interest rate by 0.75 percentage points for the second time in a row this month, to 3.5%, and announced its intention to make another increase of the same magnitude at its next monetary policy meeting in June.
The agency also considered appropriate the process of “partial normalization” of the interest rate, that is, a monetary tightening that still maintains a stimulus on activity.
(Reporting by Marcela Ayres, Additional Reporting by Isabel Versiani, Edited in Spanish by Manuel Farías)