Brazil Inflation Will Return to Normal, Itau CEO Says

Brazil’s inflation rate, which this month quickened to the highest level since last July, will return to normal in the “long run,” Itau Unibanco Holding SA Chief Executive Officer Roberto Setubal said.

“I was more worried about inflation maybe six months, one year ago,” Setubal said today in an interview with Bloomberg CEO Dan Doctoroff at Bloomberg’s Sao Paulo office. “In the long run, inflation will be returning to normal levels, which in Brazil is 4 percent to 5 percent.”

The central bank has responded to above-target inflation with nine straight interest-rate increases, which Setubal said helped ease his concern inflation would continue to accelerate.

Brazil’s annual inflation rate rose to 6.31 percent in mid-May from 6.19 percent the previous month, the national statistics agency said yesterday. That compares with the central bank’s target of 4.5 percent, plus or minus two percentage points. The monetary authority increased the benchmark Selic rate to 11 percent last month.

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