{"id":95911,"date":"2025-09-26T09:04:24","date_gmt":"2025-09-26T12:04:24","guid":{"rendered":"https:\/\/murray.adv.br\/?p=95911"},"modified":"2025-09-26T09:04:24","modified_gmt":"2025-09-26T12:04:24","slug":"data-will-guide-timing-of-rate-cuts-central-bank-chief-says","status":"publish","type":"post","link":"https:\/\/murray.adv.br\/en\/data-will-guide-timing-of-rate-cuts-central-bank-chief-says\/","title":{"rendered":"Data will guide timing of rate cuts, Central Bank chief says"},"content":{"rendered":"
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Gabriel Gal\u00edpolo notes communication challenges as Selic base rate stays elevated<\/strong><\/em><\/h6>\n<\/div>\n<\/div>\n
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09\/26\/2025\u00a0<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n

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Brazil\u2019s Monetary Policy Committee (COPOM) will determine how long to keep interest rates elevated based on future economic data, said Central Bank Chair Gabriel Gal\u00edpolo. He emphasized that the institution remains guided by the principles of \u201cperseverance, firmness, and serenity.\u201d<\/p>\n<\/div>\n

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\u201cThis is a central bank that remains data-dependent, and tries to be as transparent as possible about what it sees and how it\u2019s likely to respond,\u201d Mr. Gal\u00edpolo said during a press conference on Thursday (25) about the Monetary Policy Report.<\/p>\n<\/div>\n

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The COPOM kept the benchmark Selic rate at 15% last week and said it would remain \u201cvigilant,\u201d evaluating whether maintaining this level for a prolonged period would be enough to bring inflation down to its 3% target.<\/p>\n<\/div>\n

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Mr. Gal\u00edpolo said this marks a new phase in the tightening cycle, one that brings challenges \u201cin terms of explaining our work to the public.\u201d He added that the committee had anticipated this more complex stage.<\/p>\n<\/div>\n

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Central Bank Economic Policy Director Diogo Guillen explained why last week\u2019s COPOM statement no longer included the phrase, used in the July meeting, that referred to a \u201cpause\u201d in the rate hike cycle, language that had left the door open for rates to rise above 15% if needed.<\/p>\n<\/div>\n

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Mr. Guillen said the committee is now more confident that the economic scenario is unfolding as expected, making it possible to move past the idea of a pause. The focus now is on whether the current level of interest rates is sufficient for inflation to converge toward the target.<\/p>\n<\/div>\n

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The Central Bank\u2019s stance\u2014keeping interest rates at their highest level in nearly two decades for an extended period\u2014has drawn criticism this week from Finance Minister Fernando Haddad. On Tuesday, he said the current rate level was unjustified and that there was room for cuts. Still, he acknowledged that Mr. Gal\u00edpolo took over in the midst of a \u201cmajor crisis\u201d and that he was not in his position.<\/p>\n<\/div>\n

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Asked about the criticism, Mr. Gal\u00edpolo said it was \u201cabsolutely legitimate\u201d for the finance minister to voice his opinion. He also referred to recent remarks by National Treasury Secretary Rog\u00e9rio Ceron, who said the high Selic rate \u201churts\u201d from a fiscal policy standpoint, but also recognized that monetary policy must be conducted and has been \u201cvery successful.\u201d<\/p>\n<\/div>\n

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\u201cPersonally, I think it\u2019s a luxury to have the Finance Minister and the Treasury Secretary making comments on monetary policy with such delicacy, kindness, and respect,\u201d Mr. Gal\u00edpolo said.<\/p>\n<\/div>\n

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He added that concerns that high interest rates could trigger a \u201csharp downturn\u201d in the economy have eased, as have doubts about whether monetary policy would succeed in steering inflation toward the Central Bank\u2019s projections.<\/p>\n<\/div>\n

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\u201cThings are moving toward what looks like a softening of economic activity, precisely to protect workers\u2019 income,\u201d he noted.<\/p>\n<\/div>\n

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The Central Bank\u2019s updated GDP forecast points to 2% growth in 2025, with a slowdown in the second half of the year that is expected to continue into 2026, when the economy is projected to grow 1.5%. Meanwhile, inflation is expected to continue declining, reaching 3.6% at the end of 2026, 3.2% in 2027, and 3.1% in the first quarter of 2028. The inflation target is 3%.<\/p>\n<\/div>\n

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Mr. Gal\u00edpolo also commented on planned changes to the housing credit system. He said a new framework is being developed and will be discussed at a meeting of the National Monetary Council (CMN). \u201cWe can\u2019t wait until savings start running low,\u201d he said, noting that this could force the government to find a new solution without enough resources to ensure a smoother transition to the new system.<\/p>\n<\/div>\n

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\u201cOur view at the Central Bank is that the longer we wait, the fewer tools, less room, and fewer instruments we\u2019ll have to cushion a potential transition.\u201d<\/p>\n<\/div>\n

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Mr. Gal\u00edpolo also said that finding a solution for the proposed constitutional amendment on the Central Bank\u2019s financial autonomy depends on internal consensus.<\/p>\n<\/div>\n

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He noted that the government supports the proposal, but there is resistance regarding changes to the Central Bank\u2019s legal status\u2014from a public-law to a private-law entity\u2014and to the labor regime for its staff, who would shift to the private-sector labor code (CLT). \u201cFrom both the Senate\u2019s and the government\u2019s perspective, the ball is now somewhat in our court,\u201d he said.<\/p>\n

*By\u00a0Gabriel Shinohara,\u00a0Alex Ribeiro,\u00a0Giordanna Neves\u00a0and\u00a0Ana\u00efs Fernandes\u00a0\u2014 Bras\u00edlia and S\u00e3o Paulo<\/p>\n

Source: Valor International<\/p>\n

https:\/\/valorinternational.globo.com\/<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Gabriel Gal\u00edpolo notes communication challenges as Selic base rate stays elevated     09\/26\/2025\u00a0 Brazil\u2019s Monetary Policy Committee (COPOM) will determine how long to keep interest rates elevated based on future economic data, said Central Bank Chair Gabriel Gal\u00edpolo. He emphasized that the institution remains guided by the principles of \u201cperseverance, firmness, and serenity.\u201d \u201cThis […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8106],"tags":[26452,26451],"class_list":["post-95911","post","type-post","status-publish","format-standard","hentry","category-murray-news","tag-central-bank-chief-says","tag-data-will-guide-timing-of-rate-cuts"],"yoast_head":"\nData will guide timing of rate cuts, Central Bank chief says - Murray Advogados<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/murray.adv.br\/en\/data-will-guide-timing-of-rate-cuts-central-bank-chief-says\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Data will guide timing of rate cuts, Central Bank chief says - Murray Advogados\" \/>\n<meta property=\"og:description\" content=\"Gabriel Gal\u00edpolo notes communication challenges as Selic base rate stays elevated     09\/26\/2025\u00a0 Brazil\u2019s Monetary Policy Committee (COPOM) will determine how long to keep interest rates elevated based on future economic data, said Central Bank Chair Gabriel Gal\u00edpolo. 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