BRASILIA (Reuters) – Brazil’s central bank said on Tuesday that further deterioration in inflation expectations could extend the monetary tightening cycle, with its policy conduct remaining “a fundamental factor” in steering expectations back towards the 3% target.
In the minutes from the Nov. 5-6 meeting, when policymakers accelerated the tightening pace with a 50 basis-point hike that pushed rates to 11.25%, the central bank noted that recent concerns over rising public spending and the sustainability of the country’s fiscal framework have significantly impacted asset prices and market expectations.
(Reporting by Marcela Ayres, editing by Ed Osmond)
