Don’t Expect Lower Interest Rates, Warns Brazil’s Finance Minister

Brazilian Finance minister Mantega Guido Mantega, the Finance minister of Brazil, told reporters this Tuesday, September 2, that the Brazilian government has no intention of lowering interest rates as long as inflation threatens to come in higher than the established target.

The Brazilian minister added that the country's benchmark lending rate, the Selic, will continue to rise until the government is assured that its original 4.5% inflation target will be met.

"Until this happens I do not think interest rates will be reduced," Mantega said in a radio interview. The benchmark rate is now 13%.

Mantega also said the Brazilian economy was decelerating following several measures to reduce available consumer credit which was having an impact on inflation.

"We've taken several measures to reduce the growth of domestic demand and the signals are that the economy is decelerating," said Mantega. He added that credit which was growing at an annualized 30%, "now is in the range of 15/20%, which is more sustainable in time."

A slower credit growth is expected to curb the demand for cars, electric appliances and new housing, helping to contain inflation.

Mantega said that inflation by the end of the year should be in the government's original target of 4.5% with a plus/minus tolerance of two percentage points which makes it 6.5%. "Our policy is long term stable, sustained growth".

Although August consumer prices index has not yet been made public by Brazil's statistics agency, in July inflation was running at an annual 6.4% with food prices continuing to push up costs across South America's largest and fast growing economy

Mercopress

Tags:

You May Also Like

Brazil Should Be Smart Enough Not to Put All Its Eggs in the Ethanol Basket

As one of the country’s well-recognized industries, the future importance of Brazil’s biofuels sector ...

In Brazil, the Rich Inherited Earth and Water

The president of Brazil’s National Confederation of Agricultural Workers (Contag), Manoel dos Santos, declared that water ...

Amnesty Pans Brazil’s Politics of Fear Against Poor

Amnesty International criticized recently what it calls "political game-playing" in the debate over public ...

Brazil Warns WTO Talks Will Fail If Past Consensus Is Not Kept

Brazilian Foreign Minister Celso Amorim warned on Tuesday that global trade talks would fail ...

Brazil Asks for Arrest of Woman Who Murdered American She Met on the Internet

The Brazilian police have indicted a Brazilian woman for kidnapping and then killing an ...

Brazil’s Presidential Campaign Cannot Start Before July. Do the Candidates Know?

In Brazil, elections are rigidly controlled at least in paper by a Federal Election ...

Brazil Issues Bonds in Reais to Help Pay US$ 16 Billion in Debt

Brazil's National Treasury announced today, February 7, its third issue of treasury bonds in ...

Brazilian NGOs Betting WTO Meeting Will Be a Failure

Representatives of a group of Brazilian NGOs, most of them worker groups and women’s ...

Brazil Finance Minister Held Hostage and Robbed of All His Money

Brazil's Finance Minister, Guido Mantega, was taken hostage for several hours while visiting a ...

Brazil Loosens Its Grip on Airports and Ports Privatizing and Leasing Facilities

The Brazilian government is expecting to raise US$ 1.3 billion with the leasing of ...

WordPress database error: [Table './brazzil3_live/wp_wfHits' is marked as crashed and last (automatic?) repair failed]
SHOW FULL COLUMNS FROM `wp_wfHits`