Arminio Fraga Says Brazil Still Has Inflationary, Labor Market Pressures

Former president of Brazil’s central bank and chairman of BM&F Bovespa SA, Arminio Fraga, said the central bank should analyze inflationary pressures before making decisions on the basic interest rate.

“The market, if you look at the interest rate, is still projecting an increase, and I think this is to do with the fact that the economy is still at idle minimum capacity,” he said yesterday in an interview on XPTV, the online channel of the Rio de Janeiro brokerage XP Investimentos CCTVM SA.

“There is some pressure in the labor market,” he said. The trend is for rates to fall in the coming years, “not now,” he added.

To contact the reporter on this story: Felipe Frisch in São Paulo ffrisch1@bloomberg.net