O Banco Central (BC) considered the scenario of uncertainties about the intensity of the elevation of tariffs import USA at the last meeting of Monetary Policy Committee (Copom)says the minutes of the meeting released on Tuesday (25).
According to the monetary authority, doubts about the implementation of tariffs have impact on expectations, pricing and inflation in emerging countries. In the collegiate’s evaluation, part of the scenario’s deterioration, which has already been discussed in previous meetings, begins to materialize.
“There are doubts about the conduct of economic policy in various dimensions, such as possible tax stimuli, restrictions on work supply, scope and intensity of raising tariffs to imports and important changes in relative prices resulting from energy matrix reorientations, which can negatively impact financial conditions and capital flows for emerging economies,” says the minutes.
For the next meeting, the BC indicated a less magnitude adjustment. The total magnitude of the monetary squeeze cycle will be dictated by the firm commitment of convergence of inflation to the goal.
“Due to the lags inherent to the ongoing monetary cycle, the committee also judged appropriate to communicate that the next movement would be of less magnitude. In addition, in the face of high uncertainty, it was decided to indicate only the direction of the next movement,” says the document.
At the last meeting, the Copom rose the basic interest rate at 1 percentage point, raising Selic to 14.25% per year. The decision was unanimous.
The discharge has been hired since the December 2024 meeting, last held under the command of former BC President Roberto Campos Neto.
