President of Banco do Brasil, Roberto Campos Neto (Photo: Disclosure / Planalto Palace)
The President of the Central Bank, Roberto Campos Neto, on Tuesday (6/4) highlighted that the economy’s recovery of pre-pandemic levels is not complete, recalling that the second wave of pandemics should have an impact on activity in March. And April this year.
“The confidence level in Brazil has fallen again. I believe people are trying to understand what this new social detachment movement means for business and how long it should last,” Itao Unibesto Participating in a virtual event promoted by, Campos Neto said.
He reinforced that BC is ready to take more liquidity measures, if necessary. “But we believe that the financial system remains very fluid and well capitalized,” he said.
Lockdown and vaccination
The chairman of the Central Bank said that there are studies that suggest that lockdown measures adopted in some cities have had little success in reducing mobility in those locations. He advocated speeding up the vaccination process against Kovid-19 to reopen the economy.
“People are not living at home, for one reason or another, but we believe that these (lockdown) measures will have a shorter duration. Our simulations show that it is necessary to vaccinate more people and faster. If we go from 1 million. 2 million doses are applied per day, the impact on the economy is huge. We have to move in that direction, “he said, participating in a virtual event promoted by Itau Unibanko.
Campos Neto reiterated that there has been an increase in infections and deaths by Kovid-19 in Brazil and cited efforts of many countries in procuring vaccines against the disease. “Brazil has a successful vaccination history. Brazil is accelerating the vaccination program and eventually immunizing 1 million people a day. The United States and the United Kingdom have been very successful in their programs. We estimate that the world 10%. Vaccination at the end of this month, “he said.
According to Campos Neto, the decline in the countries where vaccine application has resulted in the highest number of deaths is demonstrated by the effectiveness of vaccination. “In July, most people at greatest risk have already been vaccinated and in the second half we should revisit the economy. But things may be different. In Chile, despite the application of vaccines, cases are increasing. , But us. Chile is not a good example for Brazil, which has taken a different degree of social isolation in recent months ”, he compared.
‘Reflection’
The Chairman of the Central Bank also reiterated that the process of raising interest rates by central banks has started due to the scenario of “reflection” in many economies. BC For the president, this reflection leads to a recurrence of wealth, while economic stimulus persists amid economic recovery.
Campos Neto reiterated that food inflation is running above the inflation target in many emerging economies, with an emphasis on Brazil and Turkey. Once again, he pointed out the size of Brazil’s fiscal package in 2020 to counter the Kovid-19 epidemic, resulting in a debt that is the largest among emerging countries. Taking part in a virtual event promoted by Itoua, “Considering this group, Brazil’s gross debt is less than the ratio of GDP to GDP.”
monetary policy
The Chairman of the Central Bank also said that the Monetary Policy Committee (COPOM) started the process of “partial normalization” of the interest rate as the basic scenario began to suggest that inflation would be high.
“Many criticized that we should have reduced Celic even further. But when we reduced Celic to 2.00% (in August 2020), we offered a scenario that had never happened. So B.C. Knew it should start some generalizations soon.) “, He said. “We see an increase in local commodity prices, which has an impact on inflation,” he reiterated.
Once again, Campos Neto estimated a sharp increase in the Celik rate – with an increase of 0.75 percentage points in March, up to 2.75% in March, already forecasting a new increase of 0.75 PPP in May – mean This may be the end of this cycle until a lower total rate.
