SAO PAULO (Reuters) – Brazil’s central bank called for greater “vigilance” as inflation expectations have shown further de-anchoring, saying it would not hesitate to raise interest rates if appropriate, minutes from its July 30-31 policy meeting showed on Tuesday.
The monetary authority’s rate-setting committee, known as Copom, said it “unanimously believes that the current stage is of even greater caution and of diligent monitoring of inflation conditioning factors,” but did not commit to future strategies.
However, “Copom unanimously reinforced that it will not hesitate to raise the interest rate to ensure inflation convergence to the target if it deems it appropriate,” the meeting minutes showed.
Brazil’s central bank last week kept interest rates unchanged at 10.50% for a second consecutive meeting, as expected, flagging worsening inflation expectations and recent market swings. The decision was unanimous.
