MNI BRIEF: 'Noise' Driving Economic Deterioration- Campos Neto

The governor of Brazil's central bank, Roberto Campos Neto, said Tuesday that the recent economic deterioration — characterized by higher inflation expectations and a weaker currency — was mostly driven by political noise.

"More recently, we've seen a sell-off in some of the emerging market countries. Brazil was more affected, but I believe this has much more to do with the noises that were created rather than the fundamentals," he said at the ECB Forum on Central Banking in Sintra, Portugal. He also noted that inflation expectations are rising despite favorable current data.

Regarding attacks by President Luiz Inácio Lula da Silva, who referred to him as a political enemy at the central bank, Campos Neto emphasized that the board is striving to demonstrate that all decisions were based on technical grounds. (See MNI INTERVIEW: Brazil's Copom On Hold Until December - Kfoury)