Economics
Brazil Central Bank Warns of Fiscal Impact on Rate Guidance
- Guidance may change even with spending cap intact: bank board
- Last week officials held benchmark rate at record low of 2%
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Brazil’s central bank said that possible changes to fiscal policy may alter its pledge to keep the benchmark interest rate at a record low for the foreseeable future.
The country’s fiscal regime has not changed so far, and inflation expectations remain “significantly” below target, policy makers wrote in minutes of the Oct. 27-28 meeting published on Tuesday. Still, a review of the bank’s forward guidance on rates may take place even if a constitutional limit on public spending remains intact, they wrote.