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UPDATE 1-U.S. rate hikes will not have a big impact on Brazil economy - c.bank chief
September 27, 2017 / 1:33 PM / 3 months ago

UPDATE 1-U.S. rate hikes will not have a big impact on Brazil economy - c.bank chief

(Adds Goldfajn comments, background)

SAO PAULO, Sept 27 (Reuters) - The outlook for moderate interest rate increases in the United States in coming months is unlikely to have a large impact on the Brazilian economy, Central Bank President Ilan Goldfajn said on Wednesday.

In a radio interview, Goldfajn reiterated nonetheless the importance of structural economic reforms, such as a major overhaul in pension rules, as a way to curb public spending and boost market confidence in the Brazilian economy.

“The biggest risk is that the international scenario changes before we do our homework,” Goldfajn told CBN radio.

Higher U.S. rates could drain capital away from emerging markets such as Brazil, which offer higher yields.

Goldfajn did not comment on monetary policy. The central bank has signaled it is likely to phase out interest rate cuts in coming months as the economy slowly emerges from its worst recession in history.

The bank is expected to cut its benchmark interest rate to a record low of 7 percent by December, from 8.25 percent currently and 14.25 percent a year ago.

Reporting by Bruno Federowski and Marcela Ayres; Writing by Silvio Cascione; Editing by Chizu Nomiyama and Susan Thomas

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