MNI BRIEF: Multiple BCB Paths To Inflation Target-Galipolo
MNI (BRASILIA) - Central Bank of Brazil Deputy Governor for Monetary Policy Gabriel Galipolo said Wednesday that there are multiple paths to achieving the inflation target and emphasized that the board had once again opted not to provide forward guidance.
“The two main messages from the minutes are the absence of guidance and the lack of a mechanical relationship with any of the variables,” he said at an event sponsored by Bradesco Asset. “There are several paths to achieving this target," he added.
“When a statement doesn’t signal something, it’s often interpreted as signaling something else by elimination, due to a desire to extract some form of guidance. But that’s not the case,” he stressed.
He was referring to market participants’ interpretation that the BCB could accelerate the pace of rate hikes at the next meeting in December following minutes from the last decision released on Tuesday, which stated that further deterioration in inflation expectations could lead to a more prolonged monetary policy tightening cycle.
Galipolo was approved by Congress to replace Roberto Campos Neto as governor early next year. (See MNI INTERVIEW: Brazil Risks Fiscal Dominance-Ex BCB Deputy)