Government changes inflation targeting system after 24 years and sets continuous target of 3%

Ministers Fernando Haddad (Finance) and (Planning and Budget) announced this Thursday (29) the decision to change the current inflation targeting system in force for 24 years and establish that the Brazilian Central Bank must pursue its objective in a continuous manner, and no longer annually. In addition, it was determined that the target for price variation will be 3%. Thus, the Brazilian Central Bank will need to seek the established inflation level without being linked to the so-called calendar year as is the case today. The goal will be considered achieved if the indicator stays between 1.5% and 4.5% (considering the tolerance interval of 1.5 percentage points above or below). The change in the horizon will take effect starting in 2025 and, according to Haddad, it was a "government decision". The minister said that the CMN (National Monetary Council) was only informed about this new guideline. The collegiate is made up of Haddad, Tebet, and the president of the Central Bank, Roberto Campos Neto the main target of criticism from the Executive due to the current level of interest rates. Translated by Cassy Dias