MNI BRIEF: BCB Can Hike Rates Regardless of Leadership -Campos
MNI (BRASILIA) - Central Bank of Brazil Governor Roberto Campos Neto emphasized Tuesday the importance of market confidence in the Central Bank's ability to raise interest rates if necessary, regardless of who will be the new governor.
"Part of the reason the risk premium dropped was because we demonstrated that the Central Bank is well organized and will always pursue its inflation target, raising interest rates if needed, whether I'm at the helm or not. The team is highly dedicated and committed to bringing inflation to the target," Campos Neto said at an event sponsored by BTG Pactual in Sao Paulo, mentioning recent improvements in Brazil's foreign exchange market and inflation expectations.
Campos Neto reiterated that the board remains data-dependent, looking at various factors to decide whether an interest rate hike in September is needed. "The weight of any given factor can vary, depending on what the economy is signaling at the time. Unanchored expectations are particularly concerning to us," he added. (See MNI POLICY: BCB Divided Over Risks To Inflation)