Brazil Central Bank Vows Tight Monetary Policy for Prolonged Period

Brazil’s central bank sees the need for tighter monetary policy for a longer period due to unanchored inflation forecasts, according to the minutes to the last interest rate decision published on Tuesday.

The board led by Gabriel Galipolo said high borrowing costs are contributing to a moderation in economic growth and will continue to do so in coming quarters. At the same time, policymakers warned that “in an environment of deanchored expectations, greater monetary restriction is required for a longer period than would be otherwise appropriate.”