Central Bank of Brazil warns against lavish fiscal spending
Policy committee says unsustainable public debt would make it harder to control inflation
Brazil’s central bank has warned that weakening fiscal discipline could have a “deleterious impact” on the effectiveness of monetary policy.
In the minutes of its latest meeting, published on Tuesday (September 25), the bank’s monetary policy committee said “the slowdown” in fiscal discipline, the increase in earmarked credit and the uncertainty over public debt stabilisation could raise the economy’s neutral interest rate. This, it said, would make it harder to control inflation.
The committee
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