Banco Central president Gabriel Galípolo called for caution in Brazil's interest rate policy on Monday amid global uncertainties from the Iran war. Speaking at a seminar in Rio de Janeiro, he stressed taking safer steps to address inflation pressures. Former BC president Arminio Fraga criticized the government's fiscal policy for not supporting the central bank.
Gabriel Galípolo, Banco Central president, opened a monetary policy seminar hosted by FGV Ibre in Rio de Janeiro on Monday. He defended the institution's caution in steering interest rates, influenced by the Iran war's impacts, which raised oil prices and inflation forecasts.
"I think I've used the word caution more times since joining the Banco Central than in my entire life before. But at the Banco Central, caution comes with serenity. It's never alone," Galípolo said. He added that the aim is to "take time to better understand the problem and make safer moves".
In March, the Copom cut the Selic rate to 14.75% per year after signs of easing inflation. The BC's Focus bulletin showed market projections for 2026 IPCA rising from 4.31% to 4.36%, nearing the 4.5% target ceiling.
After the event, former BC president Arminio Fraga criticized the Lula government's fiscal policy. "What's missing is a fiscal policy that eases the Banco Central's job a bit, and we haven't had that for a while," he said. He attended the same seminar and noted that weak fiscal policy undermines inflation control.
