Brazil central bank to keep up fight against inflation -Tombini

SAO PAULO, April 5 Fri Apr 5, 2013 3:28pm EDT

SAO PAULO, April 5 (Reuters) - Brazil's central bank chief, Alexandre Tombini, reiterated on Friday that the bank will continue to fight inflation and said monetary cycles have not been abolished in the country.

At a meeting with representatives from Brazil's infrastructure and industrial sectors, Tombini said the central bank would continue to use its traditional tools for fighting inflation, according to a press representative for the central bank.

Tombini largely echoed statements he made to Brazil's Senate on Tuesday, where he said the central bank will keep a close eye on the economy to see if there is a need for any action to tame stubbornly high inflation, the representative added.

Annual inflation in the month to mid-March climbed to 6.43 percent, dangerously close to the ceiling of the central bank's official target range of 6.5 percent.

Still, market traders widely expect the central bank to keep its benchmark Selic rate at the current record low of 7.25 percent when it next meets on April 17 to avoid disrupting a still timid economic recovery.

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Comments (1)
LouisEven wrote:
Can someone explain to me how raising interest rates, which increases the cost of manufacturing things, creates a price reduction?

Apr 09, 2013 9:15am EDT  --  Report as abuse
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