2023-08-26 20:30:41
© Reuters. President of the Central Bank, Roberto Campos Neto 02/15/2023 REUTERS/Adriano Machado
(Reuters) – Central Bank President Roberto Campos Neto said on Saturday that the latest inflation data had worsened, but stressed that the bank does not rely solely on isolated readings of indices to shape its monetary policy decisions.
“Recently we even had a slightly worse inflation number, very loaded with volatile elements”, he said, at an event of the think thank EsferaBR.
“But we don’t behave with real-time data. So, we look at it (inflation) as a trend.”
Inflation reached 4.24% in the 12 months through August, accelerating for the third straight fortnight and beating market forecasts.
Earlier this month, the Central Bank began an easing cycle with a 0.5 percentage point cut in the benchmark interest rate, to 13.25% a year, signaling more of the same for future meetings, while council members called for the rhythm of “appropriate”.
After Congress approved new fiscal rules proposed by President Luiz Inácio Lula da Silva to contain the unbridled growth of the public debt, Campos Neto stressed that fiscal revenues need to be expanded through sustainable means, improving the perspectives of public accounts and interest rates.
Campos Neto preferred not to comment directly on the proposed measures to tax offshore and closed investment funds that the government intends to send to Congress.
However, overall, he said the measures should try to protect the revenue base by ensuring efficiency and continuity of collection processes.
“Some tax collection measures end up having something that we call base erosion: you charge a tax, but the base decreases,” he said.
“So, it is important that they are measures that we manage to perpetuate their collection efficiently, without generating a lot of misallocation of resources in the way.”
(Reporting by Marcela Ayres in Brasilia)
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