BRASILIA, Nov 26 (Reuters) - Brazilian central bank head Roberto Campos Neto said on Friday the bank expects inflation to peak soon and recede next year.
In an online event with real estate executives Campos Neto said the central bank expected inflation to peak in September, but was surprised by the magnitude of energy price shocks.
He said the bank is ahead of the curve in raising interest rates, but needs to consider that Brazil has strong memories of uncontrolled inflation in its decision on rates.
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"The cost of monetary policy not doing its job is higher to society", he said. The rising interest rates will likely affect demand for mortgages, and Campos Neto said there will be discussions on that in a meeting he will have with CEOs of Brazilian banks on Friday.
Brazil's central bank will lower its projection for 2022 GDP growth from the current estimate of 2.1%, but not as much as market estimates, Campos Neto added.
The last central bank Focus survey showed estimates of 0.7% GDP growth next year. Campos Neto said the central bank was worried about the current COVID situation in Europe, the new African variant and its impact on the global economy.
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Reporting by Marcela Ayres in Brasilia, writing by Tatiana Bautzer, Editing by Louise Heavens and Alistair Bell
Our Standards: The Thomson Reuters Trust Principles.
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November 26, 2021 at 10:32PM
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Brazil central bank chief expects inflation to peak soon, recede next year - Reuters
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