BRASILIA (Reuters) – Brazil’s central bank’s monetary policy director said on Monday that policymakers “strongly believe” that long-term unachored inflation expectations are due to concerns over potential fiscal surprises.
Speaking at an event hosted by Itau BBA, Nilton David also said the central bank has yet to reach a firm conclusion on the impact of new rules for payroll-deductible loans to formal workers.
One possibility, he noted, is that borrowers will refinance expensive debt with cheaper credit, while another is that they will take on new debt.
(Reporting by Marcela Ayres; editing by Gabriel Araujo)
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