Key facts
- Galipolo said the central bank will never abandon its primary mandate of meeting the inflation target.
- He said the current inflation-targeting system should be preserved.
- Galipolo said signals on monetary policy transmission into the economy are gaining strength despite a still resilient labor market.
- He described the external environment as adverse, requiring extra caution in emerging markets such as Brazil.
Brazil central bank governor Gabriel Galipolo said on November 11 that he sees the value of providing monetary policy guidance as negative, pointing to an uncertain economic environment and market demand for an indication of the future course of action.
Speaking at a Bradesco Asset Management event in Sao Paulo, Galipolo said the central bank has only indicated that a more challenging environment calls for caution and interest rates at a restrictive level. "What is expected of a central bank is that it be frank and transparent in how it sees the economy," he said.
The governor described the current external environment as "adverse," which he said requires extra caution in emerging markets such as Brazil. He said signals regarding monetary policy transmission into the economy are gaining strength, despite a still resilient labor market.
Galipolo said the central bank will never abandon its primary mandate of meeting the inflation target and that the current inflation-targeting system should be preserved. Last week, the bank paused an easing cycle it had launched in March, holding the benchmark Selic rate at 13.75% as it grappled with a worsening inflation outlook.