• Categories
  • Archives

Brazil’s Central Bank to Keep Interest Rates High

In the judgment of the economist Ricardo Denadai, of LCA Consultants, despite the financial market’s lower forecasts in recent weeks, projecting a 5.7% inflation for 2005, the Central Bank (BC) will raise the government’s benchmark interest rate in January.

This will happen according to Denadai, “in order for inflation expectations to decline even more.” The BC readjusted its inflation target for 2005 from 4.5% to 5.1%.


According to Denadai, it is important to reduce inflationary expectations, since they influence the setting of prices, and the aim is to prevent abusive readjustments that exceed the level of inflation.


In his opinion, a “healthy” inflationary environment, with low inflation rates, is positive, because it maintains consumers’ real income and enables economic actors to make investment decisions with greater security.


Nevertheless, he weighed in with the observation that is necessary to evaluate how much sacrifice will be required to attain the BC’s goal, which, in his view, is “ambitious,” without stifling the growth of the economy, jeopardizing production and job creation, for example.


Based on the evaluation of analysts who believe that domestic demand will make a great contribution to Brazil’s economy in 2005, Denadai believes that, in addition to the purchase of durable goods, as occurred in 2004, next year there will be an improvement in the consumption of semi-durable products.


Translation: David Silberstein
Agência Brasil

Tags:

  • Show Comments (0)

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Ads

You May Also Like

Brazil Steps Up Dramatically Iron Ore Shipments to China

As Australia suspended spot sales following detentions of Rio Tinto's top sales officials in ...

Brazil and Belize Discuss War on Poverty

Brazilian President Luiz Inácio Lula da Silva received the Prime Minister of Belize, Said ...

Amid Corruption Charges, Delays, Cost Overruns, Pelé and Romário Lambast World Cup Preparations

According to Brazilian soccer legend Édson Arantes do Nascimento, better known as Pelé, Brazil ...

Best-seller Books, Plays and Movies

By Brazzil Magazine Conversa Privada (Private Talk)—Comedy. The idea is to tell the public ...

Carbon Credits to Be Traded at Brazil’s Stock Exchange

The project establishing the Brazilian Greenhouse Gas Emissions Reduction Market (MBre), or carbon credits ...

Brazil Becomes UN Center for Alcohol and Other Drugs Treatment

Initiatives by Brazil and Egypt will be recognized, in the second half of the ...

At Least 40 Indians Murdered in Brazil in 2006. Most of Them by Other Indians

A preliminary survey of murders of indigenous people in 2006 carried out by Brazilian ...

Brazil’s Petrobras Swimming in Oil and Cash: Profits Up 33%

Brazilian state oil company Petrobras said its first-quarter net profit rose 33% over 2005 ...

Accusation that the PT Was Bribing Congressmen Hurts Brazil

Latin American shares mostly moved lower on the day, hurt by a plunge in ...

Paulo Coelho Wants “War Criminal” Tony Blair Out of 2016 Rio Olympics

Brazilian best-selling author and Brazil’s best-known writer, Paulo Coelho, is making it clear he ...