Brazilian policy makers must remain vigilant to ensure that inflation converges to target by the end of next year, the central bank’s economic policy director, Luiz Awazu Pereira, said.
“Progress achieved in fighting inflation still doesn’t appear to be enough,” he said during a presentation of the regional economic report in Sao Paulo.
Swap rates on the contract due in July 2015, the most traded in Sao Paulo Friday, reversed a decline and rose 1 basis point to 13.39 percent at 3:41 p.m. local time. The real appreciated 0.3 percent to 2.9843 per U.S. dollar.
Policy makers have raised the benchmark interest rate by 0.5 percentage point in each of the past four meetings, to 13.25 percent. That’s the highest since January 2009.
The central bank board indicated in the minutes of its last gathering that it will continue to raise rates, saying it needs to do more to combat price increases. Inflation accelerated to 8.17 percent in April, exceeding the target range of 2.5 percent to 6.5 percent for the fourth-straight month.