April 4, 2013
The Central Bank is monitoring the evolution of the economic scenario to evaluate the need for other measures to battle inflation,” Tombini said.
He said the Central Bank will analyze upcoming inflation data for March to decide on future steps.
Annual inflation in the month to mid-March climbed to 6.43%, dangerously close to the ceiling of the official target range of 6.5%. Economists have raised their forecasts for inflation, suggesting policymakers will need to raise interest rates to keep price expectations under control.
February 27, 2013
Jeff Fick – The Wall Street Journal, 02/27/2013
Brazil’s real closed stronger against the U.S. dollar Wednesday as concerns about local inflation and Italy’s political uncertainties faded.
The real exited active trading Friday at BRL1.9722 to the U.S. dollar, stronger than Tuesday’s closing price fixed at BRL1.9829, according to Tullett Prebon via FactSet.
Brazil’s currency tracked gains by the euro, seen as a key barometer for the real, as global markets rebounded from this week’s selloff on inconclusive results from the Italian elections. Investor appetite for riskier assets such as emerging-market currencies recovered after Italy successfully sold about $8.5 billion of bonds, although at the highest yields since October 2012.
February 26, 2013
Julia Leite & David Biller – Bloomberg, 02/26/2013
Brazil’s inflation will slow in the second half of the year as the country produces a bumper crop of grains and the real doesn’t weaken as it did last year, central bank President Alexandre Tombini said.
“Apart from any major shocks, food inflation should not be as unfavorable as it was last year,” Tombini said at an event today in New York. A 14 percent increase in the output of grains in 2013 will help restrain food prices, he said.
The central bank’s monetary policy committee will hold the target lending rate at a record low for a third straight time next week in an effort to boost growth without further stoking inflation, according to a Bloomberg survey. In the minutes to its January meeting, the bank’s board said it would hold rates for “a sufficiently prolonged period.”
February 25, 2013
Erin McCarthy, Brian Baskin – The Wall Street Journal, 02/24/2013
The Brazilian central bank’s priority is fighting inflation, and not spurring growth, its president said in an interview before policy makers meet to set interest rates, even as Latin American’s biggest economy struggles to escape a long stretch of slow growth.
Brazil’s economy expanded around 1% in 2012, down from 7.5% as recently as 2010. At the same time, annualized inflation hit 6.2% in mid-February, close to the maximum the government has said it would tolerate.
Analysts say the perception of dueling policies aimed at stimulating the economy and tamping down inflation have created confusion in the market, causing the Brazilian real to gyrate from multi-month lows to highs in the space of a few months.
January 24, 2013
Guillermo Parra-Bernal – Reuters, 01/24/2013
Brazil’s central bank is committed to bringing down inflation, its president said, as he defended the government against criticism it had abandoned cornerstones of its economic policy.
Policymakers are not ruling out the use of traditional monetary tools to contain rising consumer prices, central bank President Alexandre Tombini told an audience at the World Economic Forum in Davos, Switzerland late on Wednesday.
Tombini said the central bank is committed to bringing inflation down to 4.5 percent this year. In the 12 months to mid-January, it accelerated to 6.02 percent from 5.78 percent one month before, putting it near the top of the bank’s target range of 4.5 percent plus or minus 2 percentage points.
December 7, 2012
David Biller, Andre Soliani – Bloomberg Businessweek, 12/07/2012
Brazil’s inflation unexpectedly accelerated as central bank President Alexandre Tombini reiterated his plan to hold interest rates at their current level, while investors bet on more cuts next year.
Prices as measured by the benchmark IPCA index rose 0.6 percent in November, the national statistics agency said today in Rio de Janeiro, more than any economist forecast in a survey by Bloomberg. Swap rates jumped.
Tombini told reporters yesterday that the bank is standing by its monetary policy strategy after traders rocked markets with bets he will resume cutting borrowing costs. The bank yesterday released its minutes to last week’s monetary policy meeting and pledged to keep the Selic rate at a record low 7.25 percent for a prolonged period.
July 27, 2012
Each Friday, through the Brazil Portal feature “The Week in Review”, the Brazil Institute will highlight Brazil’s news topics in one concise summary.
Economic updates from Brazil this week were characterized by a flood of both good news and bad news, indicating that the domestic fiscal picture remains murky. Some of the more negative aspects included falling job creation rates, decreasing federal tax revenues, dwindling consumer confidence, and a social security program plummeting deeper into the red. However, these less-than-positive developments are assuaged by some good news: though President Dilma Rousseff is apparently “very worried” about the economy, central bank chief Alexandre Tombini predicts an upturn in the second half of the year. The Brazilian economy is also buoyed by foreign investment, which continues to increase despite the slowdown, increased interest from venture capital firms, not to mention the profits from a gargantuan corn sale to the drought ridden United States. The dichotomy of positive and negative economic global outlooks is highlighted in a translation of a piece from Folha de S.Paulo, in which Carlos Lins da Silva analyzes the mixed-message on Brazil and how it is affecting the nation’s populace.
With regards to US-Brazilian economics, the Miami Herald reports that despite the Brazilian slump, trade between Florida and Brazil continues to expand . This fact coincides with the growing campaign to waive visas for Brazilian visitors, a charge led by Florida politicians. The Miami-Dade area is already significantly culturally connected to Brazil, and politicians there believe the visa waiver would bring jobs and stimulate the economy.
As athletes from all over the world congregating in London this week for the Olympics, Dilma Rousseff was among them. The Brazilian President is in England attending the opening ceremonies, and will meet with David Cameron later this week to discuss scientific innovation and the economy. The Games’ commencement has inspired commentary by Brazilian sports Minister Aldo Rebelo on how the 2016 Rio Games will compare.
July 26, 2012
Matthew Malinowski – Bloomberg, 07/26/2012
Brazil’s consumer loan default rate fell in June for the first time in three months, as the government’s drive to lower borrowing costs provides relief to indebted families.
The consumer default rate declined to 7.8 percent from a revised 7.9 percent in May, the central bank said in a report distributed today in Brasilia. The company loan default rate fell to 4 percent from 4.1 percent the month prior.
Since August, Brazil has cut the benchmark Selic rate 450 basis points to the record low 8 percent and pressured banks to lower rates on loans to help over-extended borrowers. Easier credit access, a drop in delinquency rates and record-low unemployment will help drive consumption in the world’s second- largest emerging market, central bank President Alexandre Tombini told reporters on July 23. Policy makers have also implemented growth measures such as tax breaks on automobiles and consumer goods.
July 26, 2012
Paul Hannon and Jason Douglas – The Wall Street Journal, 07/26/2012
LONDON–Brazil’s central bank president Alexandre Tombini said Thursday he expects the Brazilian economy to expand 4% on an annualized basis in the second half of the year, adding that emerging markets will face tougher competition from developed economies in the coming years.
Mr. Tombini told an investment conference in London that he expects rich nations to drive down labor costs and take other actions to increase their international competitiveness in the wake of the financial crisis.
“Two years down the road we will have to face much tougher competition than we did before the crisis,” Mr. Tombini said, referring to Brazil and other emerging markets.
July 23, 2012
Kenneth Rapoza – Forbes, 07/23/2012
Brazil’s weak economy will be flexing its muscles heading into the second half and likely grow at 4 percent in annualized terms, Brazil’s Central Bank president Alexandre Tombini told reporters in a conference call on Monday.
“Domestic sectors of the economy are already playing a more important role for the second half, regardless of the global slowdown,” he said. Brazil is still a very much a closed economy, with exports accounting for just 12 percent of GDP. While a lackluster global economy has surely impacted the major commodity exporters like Vale and affected confidence, Tombini said that a series of macroeconomic measures taken over the year — from payroll tax breaks to other fiscal incentives, coupled with falling interest rates — are already having their desired affect in the local economy.
Tombini isn’t the only believer. Foreign companies are pumping money into Brazil.