Brazil monetary policy to remain vigilant on CPI target: Tombini

Filipe Pacheco – Bloomberg Business, 7/01/2015

Brazil’s Central Bank President Alexandre Tombini reiterated that policy makers are committed to the goal of bringing inflation to target at the end of next year.

Policy makers are seeing market expectations converge toward the center of the inflation target of 4.5 percent per year in the “mid- to long-term interval,” Tombini said at an event in Sao Paulo on Wednesday evening. “Our goal is to bring inflation to the center of the target at the end of 2016.”

He added that the central bank’s goal has been to prevent inflationary effects of “relative price realignment in the short term from being transmitted to a longer horizon.”

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Brazil’s Rousseff Cancels Davos Trip To Attend Bolivian President’s Inauguration

Brianna Lee – International Business Times, 1/14/2015

Brazilian President Dilma Rousseff has been focusing her energy on restoring investor confidence in Brazil just months after narrowly winning her second term against a market-oriented opponent. But she is now drawing attention for scrapping plans to attend the World Economic Forum in Davos, Switzerland, next week, opting instead to go to the swearing-in ceremony of Bolivian President Evo Morales.

Rousseff had not confirmed her attendance at the forum, which takes place Jan. 21-24. According to local reports, she made a late decision Tuesday not to attend the international meeting so that she could travel to La Paz, Bolivia, for Morales’ inauguration as he starts his third term. Newly appointed Finance Minister Joaquim Levy and Alexandre Tombini, the president of Brazil’s central bank, will go to the forum to represent the country.

The president sparked criticism for her decision, with Brazilian weekly magazine Veja commenting that it would have been an “opportune moment” for her to restore investor confidence by attending the Davos meeting, given Brazil’s “worsening economic indicators and external pessimism.” But Brazil’s Estadão newspaper, citing an unnamed presidential aide, said the president was concerned about stoking domestic political turmoil with an overseas trip in the wake of looming legislative elections.

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Brazil Real Intervention Out of Sync With Slowdown, IMF Says

Sebastian Boyd – Bloomberg, 7/29/2014

The International Monetary Fund said Brazilian central bank President Alexandre Tombini shouldn’t shore up the real as Latin America’s largest economy stalls and inflation accelerates.

Adjusting for inflation, Brazil’s currency was 5 percent to 15 percent stronger than “implied by fundamentals and desirable policies” in 2013, IMF economists wrote in a research report published today. The real has appreciated 5.9 percent this year against the dollar while inflation accelerated to a 13-month high and economic growth slowed.

The central bank said last month it was extending through the end of 2014 a currency intervention program aimed at helping to boost the real and curb prices for imports. After nine consecutive increases in the target lending rate, policy makers held it at 11 percent on July 16 for a second straight meeting. The central bank didn’t return phone and e-mail messages seeking comment today.

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Brazil’s Tombini says Global Economy recovering, but sees volatility

Matthew Cowley – The Wall Street Journal, 5/13/2014

Global markets will be more volatile as the world economy starts to recover from the financial and economic crisis, but this shouldn’t be confused with vulnerability, the head of the Central Bank of Brazil said Tuesday.

The global economy is “finally recovering from the lingering effects of the global financial crisis” and international monetary conditions are beginning “a process of normalization,” Alexandre Tombini said in a speech to the Brazilian Chamber of Commerce in Great Britain.

This process is already under way in the U.S., he said, referring to the Federal Reserve’s move to reduce its bond-buying program.

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Central Banker Tombini says Brazil well-prepared for QE pullback

Pedro Nicolaci da Costa – Wall Street Journal, 4/10/2014

Brazil has built up enough domestic buffers against rapid shifts in capital flows to allow it to withstand a pullback from unconventional interest rate policy in the world’s largest economies, Central Bank Governor Alexandre Tombini said.

Mr. Tombini agreed in part with Indian central bank chief Raguram Rajan, who argued during a Brookings Institution speech that aggressive monetary easing in advanced economies had made life harder for developing countries.

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Brazil raises key rate for ninth straight meeting to 11%

Matthew Malinowski & Raymond Colitt – Bloomberg, 4/2/2014

Brazil signaled that the world’s longest rate tightening cycle might be coming to an end and raised borrowing costs for a ninth straight meeting.

The bank’s board, led by its President Alexandre Tombini, today voted unanimously to raise the Selic rate to 11 percent from 10.75 percent, as forecast by all 57 economists surveyed by Bloomberg. Policy makers have raised borrowing costs by 375 basis points, or 3.75 percentage points, in less than a year.

The bank at its last meeting in February signaled that tightening might soon end by halving the pace of rate increases. Brazil in the last year has increased borrowing costs more times than any other central bank worldwide, with the total increase in borrowing costs trailing only Turkey among major economies. Policy makers’ efforts have also been helped by the second-biggest currency gain among emerging markets since January.

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