MNI BRIEF: Brazil Government Sets 3% Continuous Inflation Goal
Brazil's government confirms a new inflation-targeting system.
Brazil's government has confirmed a new inflation target for the Central Bank of Brazil starting in 2025 under which it will have to limit the rate of increase in prices to 3% continuously and not just at the end of the year, it said on Wednesday.
The new target, which was first announced last year, is now permanent, replacing the system under which it is decided annually for 36 months in advance by the National Monetary Council, composed of the Central Bank, the Ministry of Finance, and the Ministry of Planning and Budget.
Under the new system, the Central Bank will be required to write an open letter to the Ministry of Finance whenever inflation remains above the target for six consecutive months. Previously, the monetary authority only had to explain itself if inflation ended the year outside a tolerance range of 1.5 percentage points up or down. (See MNI INTERVIEW: Brazil's Copom On Hold Until December - Kfoury)