BRASILIA (Reuters) – Brazil’s central bank governor Roberto Campos Neto said on Saturday that the latest inflation data had worsened but underscored the bank’s non-reliance on singular index readings to shape its policy decisions.
“Recently, we even had a slightly worse inflation number, very loaded with volatile elements,” he said at an event hosted by think tank EsferaBR.
“But we don’t behave with real-time data. We look at it (inflation) as a trend.”
Inflation hit 4.24% in the 12 months through mid-August, accelerating for the third fortnight in a row and beating market forecasts.
Earlier this month, the central bank kicked off an easing cycle with a 50-basis-point rate cut to 13.25%, signaling more of the same for future meetings as board members have called the pace “appropriate.”
After Congress greenlit new fiscal rules proposed by President Luiz Inacio Lula da Silva to curb unbridled public debt growth, Campos Neto stressed the need for tax revenue to expand through sustainable means, thereby enhancing the outlook for public accounts and interest rates.
“Government is making a big effort, it doesn’t depend solely on it,” he said.
Regarding proposed measures aimed at taxing offshore and closed-end investment funds, which the government intends to submit to lawmakers, Campos Neto refrained from offering a direct opinion.
But, generally speaking, he said that measures should seek to safeguard the revenue base, ensuring the efficiency and continuity of the collection processes.