BRASILIA, July 7 (Reuters) - Brazil’s political crisis seems to be having a neutral impact on inflation, central bank chief Ilan Goldfajn said in an TV interview late on Thursday, suggesting uncertainty over President Michel Temer’s grip on power may not prompt the bank to change its monetary policy.
“Everything seems to indicate that we are walking down the same path,” Goldfajn told GloboNews TV. “It looks like maybe the inflationary and disinflationary effects have canceled each other out, or that there have been no effects at all.”
The central bank had been signaling since its latest policy decision in May that higher political uncertainty due to a corruption investigation into Temer could lead to a reduction in the size of rate cuts.
Policymakers have slashed the benchmark Selic rate by 400 basis points since October, to 10.25 percent, and are expected to cut it further until it reaches 8.25 percent by December, according to the weekly poll.
“The important thing is that we will always be monitoring (the scenario) to make sure whether we should be moving to one side or the other. We are walking in the middle for now,” Goldfajn said. (Reporting by Marcela Ayres; Writing by Silvio Cascione; Editing by Bernard Orr)