© Reuters. FILE PHOTO: People walk in front the Central Bank headquarters building in Brasilia, Brazil March 22, 2022. REUTERS/Adriano Machado
BRASILIA (Reuters) – Brazil’s central bank chief Roberto Campos Neto said on Tuesday that policymakers have taken the necessary steps to ensure inflation reaches its targets until 2025, reinforcing they will remain vigilant to see if keeping interest rates at the current 13.75% level for long enough will ensure such convergence.
In an open letter to justify 2022 inflation at 5.79%, above the government’s target of 3.5% and the top 5% of its tolerance band, he said the inertia from 2021 inflation and higher commodity prices were important factors, also mentioning imbalances between demand and supply, shocks in food prices and recovery in services and employment.