Mantega Says Brazil Central Bank Is Free to Move Interest Rate

Brazil’s interest rate is not frozen and the central bank has freedom to raise or cut it as judged necessary, Finance Minister Guido Mantega said yesterday.

Analysts covering Brazil expect policy makers to raise interest rates by 1.25 percentage points to 8.50 percent by year-end, according to the latest central bank survey of about 100 economists, published April 1.

“The central bank can raise the rate and cut the rate when it thinks it’s necessary,” Mantega said during an interview with Miriam Leitao broadcast by Globonews. “It can be done at any time,” he said.

According to Mantega, the Selic can vary less than it has in the past as Brazil has a “more efficient” monetary policy today, with “more civilized” interest rates.

“It doesn’t need to go as high as it did in the past, if it needs to go up,” Mantega said. “I’m not saying rates should go up”

Brazil’s consumer prices rose 6.43 percent in the 12 months through mid-March. Monetary policy makers have kept borrowing costs at a record-low 7.25 percent since October to revive an economy growing at the slowest two-year pace in more than a decade.

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