Brazil’s National Monetary Council (CMN) on Tuesday set an ambitious inflation target of 3.75% for 2021, consolidating its policy of gradual reduction for the inflation rate. The council also re-affirmed its targets of 4.25% for 2019 and 4.0% for 2020. The target for 2018 is 4.5%. In all cases, the council maintained a target band of 1.5 percentage points. The target, and the band, are part of the Brazilian government’s inflation targeting policy, set in motion in 1999 as a bar against high inflation rates. Under the policy, the Brazilian Central Bank is obliged to employ interest rates and other tools to keep inflation within the target range. Inflation is currently running a little under 4.0%.
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