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Brazilian Central Bank Says 3% Could Be Inflation Rate in the Long Term

02/01/2017 - 14h37

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MARIANA CARNEIRO
FROM SÃO PAULO

The President of the Central Bank (BC), Ilan Goldfajn, said on Tuesday (the 31st) that the target for Brazilian inflation should be trending towards lower levels, close to 3% per year in the long run. According to Ilan, Brazil is on the path towards lowering inflation to international levels.

Projections for this year and for 2018 vary around the middle of the current target range of 4,5%. When questioned as to when this could happen, he said that the target for 2019 will be set in June and that a decision hasn't yet been made.

Brazil has already had inflation targets of around 3% in the past. The National Monetary Council (CMN) set the target at 3,5% for 2002, but the INPA (official inflation index) came in at 12,53% that year due to a strong Dollar reflecting uncertainty related to former President Lula's election.

The first target set for 2003 was 3,25%, but was subsequently adjusted up to 8,5% - inflation for the year ended up coming in at 9,3%

Before the President of the BC spoke, President Michel Temer declared in his speech to investors that inflation would already come in below 4,5% in 2017.

Translated by LLOYD HARDER

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