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SAO PAULO, May 15 (Reuters) - Brazilian central bank director Luiz Awazu Pereira said on Friday that the outlook for inflation to converge to the center of the official target in 2016 has strengthened.
In the regional economic report released in Sao Paulo, Pereira said that despite signs of moderation in non-regulated prices, past efforts to battle inflation are not yet sufficient.
He said he expects an economic slowdown in 2015, with some improvement in business confidence in the second half of the year. Pereira added that recovering that confidence remains a challenge.
The central bank has signaled it will continue to raise the benchmark Selic rate to salvage its inflation-fighting credibility despite fears higher rates would worsen an expected economic recession this year.
Most market traders expect the bank to raise the Selic by 50 basis points for the fifth straight time, to 13.75 percent, when its monetary policy board meets again on June 3, according to the yields of Brazil interest rate futures on Friday.
The central bank aims to keep inflation at the center of the target range of between 2.5 percent and 6.5 percent. Inflation has remained above the 4.5 percent center since 2010 and in April hit an 11-year high of 8.17 percent. (Reporting by Bruno Federowski; Writing by Alonso Soto)