Brazil’s Central Bank should step up interest rate hikes to prevent chasing inflation later – BNP Paribas economist

The economist believes that if the cycle takes time to lower expectations, Brazil may once again see long-term inflation projections moving towards 5%.

RIO DE JANEIRO, BRAZIL - BNP Paribas' head of research for Latin America Gustavo Arruda is displeased with Central Bank president Roberto Campos Neto's indication that the monetary authority will not react to each high frequency data release.

According to Arruda, in the September 21 meeting, the Central Bank should raise the basic interest rate by 1.5 percentage points, taking the SELIC from 5.25% to 6.75% per year, something entirely ruled . . .

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