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CMN sets inflation target at 3.5% by 2022

Economic policy

The margin of tolerance was maintained at 1.5 percentage points, more or less

The National Monetary Council (CMN) approved on Thursday (27/6), at an ordinary meeting, the inflation target of 3.5% for 2022. The margin of tolerance was maintained at 1.5 percentage points, for more or for less.

 The Secretary of Economic Policy, Adolfo Sachsida, pointed out that the reduction of the target was based on a broad review of the economic literature, in which the optimum values, the current regimes around the world were studied, and an exhaustive analysis was made for the Brazilian scenario .

 According to Sachsida, a lower target is not correlated with higher interest rates. "The fact that the target is decreasing does not mean that the government will have to raise interest rates. In addition, a low target anchors the long-term expectation and reduces uncertainty regarding the future behavior of inflation, "said the secretary.

Undersecretary for Macroeconomic Policy, Vladimir Kuhl Teles, said the decision to continue reducing the target reflects optimism about the fiscal conditions for the future from measures such as spending ceiling approval. "We are going into a situation of normalcy and macroeconomic stability caused in part by fiscal stability," he said.

According to Under Secretary for Fiscal Policy, Marco Cavalcanti, the new target also reflects the expectation of approval of the New Pension Plan and the implementation of other reforms that will allow the improvement of the country's production conditions and supply capacity.

The inflation targets for 2019, 2020 and 2021 were set by the CMN at previous meetings at 4.25%, 4.00% and 3.75%, respectively, with a tolerance interval of 1.50 percentage points and for less.