BRASILIA, July 1 Interest rates at current
levels should bring Brazil's inflation back to the center of the
government target, central bank chief Alexandre Tombini said in
an interview published on Tuesday, signaling he has no plans to
raise borrowing costs anytime soon.
Tombini reiterated that inflation should end below the
target's ceiling of 6.5 percent this year, adding that food
inflation, which is blamed for a surge in prices earlier this
year, is already "dissipating."
"I would like to reiterate that if monetary conditions are
maintained, inflation would tend to converge toward the target
over the relevant horizon for monetary policy," Tombini told the
central bank's internal news outlet "Conexão Real."
He said that monthly inflation should remain low in coming
months, but that 12-month inflation would likely remain high due
to the surge in food prices at the start of the year.
Consumer prices rose 6.41 percent in the
12-month period through mid-June as the soccer World Cup pushed
up demand for airline tickets.
The central bank's goal is to keep annual inflation at the
center of the target range of between 2.5 and 6.5 percent.
The central bank forecasts that the annual inflation rate
will likely drop to 5.1 percent in mid-2016 from an expected 6.4
percent at the end of 2014, edging closer to its 4.5 percent
target, according to its quarterly inflation report released
The bank's benchmark lending rate is currently
at 11 percent after nine consecutive increases through April.
Link to the interview in Portuguese: bit.ly/TAMAuJ
(Reporting by Alonso Soto; Editing by Lisa Shumaker)