Tombini Says Brazil Central Bank Seeking 4.5% Inflation by 2016

Brazil’s central bank is working to slow inflation back to its 4.5 percent target by no later than 2016, the central bank’s President Alexandre Tombini said.

“We are working to bring inflation to the 4.5 percent center of the target in the relevant horizon; I said relevant horizon, in the next two years, 2015 and 2016,” Tombini said in a video posted last night on the presidency’s blog. “That’s what we are working on at the moment. That is the central bank’s chief mission.”

Policy makers led by Tombini lifted the benchmark interest rate on Oct. 29 by 25 basis points to 11.25 percent, saying the first boost since April was designed to ensure a “benign outlook” for inflation. They will increase the Selic by another quarter-point at their Dec. 3 meeting, according to the median estimate of 10 economists surveyed by Bloomberg.

Swap rates on the contract due in January 2017 rose 15 basis points, or 0.15 percentage point, to 12.22 percent at 1:20 p.m. local time. Earlier today Brazil’s national statistics institute released data that showed Latin America’s largest economy grew 0.1 percent in the third quarter, emerging from recession.

The central bank is in a comfortable position regarding its currency-swaps program, Tombini also said in the interview with the presidency’s blog yesterday. He said that in his speech earlier the same day he did not indicate what would become of the program after Jan. 1.

Brazil’s real fell 1.8 percent at 1:28 p.m. today to 2.5768 per U.S. dollar, its weakest level in more than a week.

Before it's here, it's on the Bloomberg Terminal.