UPDATE 1-Brazil central bank vows inflation cut to 4.5 pct in 2017 -director

jueves 5 de noviembre de 2015 09:27 GYT
 

(Adds bank director comments and inflation data)

BRASILIA Nov 5 (Reuters) - The Brazilian central bank will take the necessary measures to bring inflation back to the 4.5 percent target in 2017, a bank director, Altamir Lopes, said on Thursday.

It is the first time the bank has given a timeframe for reaching the center of its official target range after it dropped its outlook to meet this goal late 2016 due to a weaker Brazilian currency.

Lopes' comments drove Brazilian interest rate futures <0#2DIJ:> higher on Thursday as traders interpreted them as a signal that the bank was more willing to raise rates if inflationary pressures did not subside.

"The central bank will adopt necessary measures to fulfill our inflation-targeting objectives and bring inflation to the 4.5 percent target in 2017," Lopes said in a briefing about regional economic performance.

Lopes, the bank's director of economic policy and a voting board member, said the adjustment of prices, mostly government administered prices, has been slower than the bank expected.

Still, the bank expects an intense slowdown of prices next year as service inflation eases.

The central bank has kept interest rates on hold in its last two policy meetings, signaling borrowing costs will remain stable for some time as a deepening recession is expected to drag down prices.

Even with Brazil facing its worst recession in 25 years, inflation has continued to climb to near 10 percent, the highest in 12 years. (Reporting by Marcela Ayres; Writing by Alonso Soto Editing by W Simon)