April 30, 2020 / 4:13 PM / 25 days ago

Brazil central bank could print money, buy domestic debt -Economy Minister Guedes

BRASILIA, April 30 (Reuters) - Brazil’s Economy Minister Paulo Guedes said on Thursday that the central bank could print money and buy domestic government debt, effectively monetizing the debt without creating inflation, as a potential tool in its crisis-fighting arsenal.

“In a situation where inflation virtually goes to zero, interest rates collapse and there is what we call a liquidity trap, the central bank can indeed issue a lot of currency and even buy domestic debt,” Guedes said in a live parliamentary committee hearing.

“We are attentive to all possibilities,” he added. (Reporting by Isabel Versiani Writing by Jamie McGeever)

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