- Title: Brazil central bank sees rate cuts despite stronger job market
- Date: 9th August 2017
- Summary: BRASILIA, BRAZIL (AUGUST 9, 2017) (REUTERS) GENERAL VIEW OF EXTERIOR OF THE CENTRAL BANK OF BRAZIL BUILDING SIGN ON EXTERIOR OF BUILDING READING "CENTRAL BANK OF BRAZIL" PRESIDENT OF THE CENTRAL BANK OF BRAZIL, ILAN GOLDFAJN CONVERSING WITH JOURNALISTS AT DESK CLOSE SHOT OF GOLDFAJN TALKING GOLDFAJN SPEAKING WITH JOURNALISTS ON OPPOSITE SIDES OF DESK (SOUNDBITE) (Portuguese) PRESIDENT OF THE CENTRAL BANK OF BRAZIL, ILAN GOLDFAJN, SAYING: "Generally, the job market is usually the last to improve, but that is happening slightly faster than we thought. First I thought that we'd see the GDP, consumption, investments returning and the labor market after. The labor market is coming along a little faster, it always starts by creating informal jobs, and then later come jobs on the formal market." GOLDFAJN SPEAKING AT DESK WITH JOURNALIST TAKING NOTES CLOSE SHOT OF JOURNALIST TAKING NOTES (SOUNDBITE) (Portuguese) PRESIDENT OF THE CENTRAL BANK OF BRAZIL, ILAN GOLDFAJN, SAYING: "We don't believe interest rates will be stuck where they are in the long run. We can have lower structural rates if we keep moving forward with economic reforms, but we need to grow." GENERAL VIEW OF ROOM WITH GOLDFAJN AND JOURNALISTS GOLDFAJN SPEAKING AT DESK AND GESTURING (SOUNDBITE) (Portuguese) PRESIDENT OF THE CENTRAL BANK OF BRAZIL, ILAN GOLDFAJN, SAYING: "Basically, we will look at whether the reforms will put public finances into shape - the reforms and the adjustments - if they will let Brazil grow faster and if they will let structural interest rates fall. That's what we're looking at, it's not a relationship of one-for-one, we'll take it all into account and see if public finances are sorted, the economy grows faster and the structural rates are lowered." GOLDFAJN BIDDING FAREWELL TO JOURNALISTS
- Embargoed: 23rd August 2017 21:05
- Keywords: Central Bank recession Ilan Goldfajn job market
- Location: BRASILIA, BRAZIL
- City: BRASILIA, BRAZIL
- Country: Brazil
- Topics: Budget/Taxation/Revenue,Government/Politics
- Reuters ID: LVA0016TFQZB7
- Aspect Ratio: 16:9
- Story Text: Brazil's job market has recovered slightly faster than expected after a deep recession, but that should not prevent the central bank from cutting interest rates in coming months, bank president Ilan Goldfajn told Reuters on Wednesday (August 9).
"The job market is usually the last to improve, but that is happening slightly faster than we thought," Goldfajn said in an interview for the Reuters Latin American Investment Summit. Brazil's economy added about 100,000 jobs so far this year, the Labor Ministry said later on Wednesday. The 2015-2016 recession cost Brazil nearly 3 million jobs though.
The bank signaled last week in the minutes of its latest meeting that it was likely to slash the benchmark Selic rate BRCBMP=ECI by an additional 100-basis-points in September, to 8.25 percent. Economists expect the bank to cut the Selic rate further to 7.5 percent by year's end, according to a central bank poll. The rapid drop in interest rates from 14.25 percent in October has already been stimulating economic growth, he added, saying that policymakers are working to leave behind Brazil's long past of double-digit interest rates.
"We don't believe interest rates will be stuck where they are in the long run. We can have lower structural rates if we keep moving forward with economic reforms," he said, mentioning a pension overhaul and a proposal to change long-term benchmark interest rates, both of which facing opposition in Congress. - Copyright Holder: REUTERS
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