Campos Neto says the central bank is not thinking of lowering interest rates at the moment and that the fight against inflation is ‘not won’ | Economie

“In Brazil, when we started to rise early (interest rates), they rose faster and stronger, there is an understanding that the work is already done and we have a rush, and a market waiting for interest rates to fall, we have no We’re looking at that, don’t even think about lower interest rates at this moment.”

In August, the expanded national consumer price index 15 (IPCA-15) – which is a preview of the country’s official inflation – is down 0.73%, according to the Brazilian Institute of Geography and Statistics (IBGE).

This is the lowest rate in the historical series that began in November (November) 1991. The result came from the drop in the prices of fuels, especially gasoline, ethanol and electricity.

In the opinion of the head of the central bank, despite this improvement, there is still “great concern”.

We understand that inflation has seen some improvement lately, but a large part of the improvement has been due to government actions. […] But we understand that there is still an element of great concern. The message, Campos Neto added, is that we need to fight this process, and understand that we will go through three months of downturn, probably, but the battle has not been won.”

ICMS on basic elements

The decline in inflation occurred after Lower taxes on necessitiesLike fuel and electricity. These products alone already affect inflation. In addition, it indirectly affects the prices of other items

Lowering taxes in an election year was a strategy adopted by the government and Congress. However, despite curbing inflation in 2022, these measures put pressure on prices for 2023, as many economists have already warned.

In light of this, the central bank has already admitted that the focus is on controlling inflation in 2024.