Brazil’s central bank’s strategy to slow price increases is working, and the bank is ready to leave its benchmark interest rate at 14.25% while the inflation rate declines, according to the minutes from last week’s monetary policy meeting.
The bank reiterated in the minutes, published on Thursday, that risks for inflation this year are unfavorable, while repeating its pledge to drive inflation down to target by December 2016. It repeated that conditions for lower inflation next year have improved.
Inflation is forecast to end this year at 9.3%, according to a survey of economists made by the central bank. The forecast for the end of 2016 is 5.4%. The bank’s 12-month inflation target is 4.5%, with a two-point tolerance range in either direction.