Economics
Ex-BCB Director Who Called for 2% Rates Now Wants Them at 14.25%
- Fabio Kanczuk expects central bank to extend tightening cycle
- Economist left BCB in December and joined Asa Investments
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A former Brazil Central Bank director who helped cut interest rates to an all-time low is now advocating for more aggressive hikes than most economists expect.
Fabio Kanczuk, 53, who was the economic policy director when the central bank cut rates to 2% at the onset of the pandemic, says policy makers should increase the Selic benchmark rate to “at least” 14.25%, especially if the economy doesn’t retract in the fourth quarter. Clear evidence that inflationary pressures are easing is needed before putting an end to the tightening cycle initiated in early 2021, he said.