UPDATE 1-Brazil inflation expectations up despite recession -central bank

jueves 10 de marzo de 2016 08:57 GYT
 

(Adds inflation target, context)

BRASILIA, March 10 (Reuters) - The Brazilian central bank's inflation expectations have risen for 2016 and 2017 despite a deep recession and a fall in government-regulated prices, signaling policymakers are not poised to cut interest rates from their highest level in nearly a decade.

In the minutes from its last rate-setting meeting, released on Thursday, the bank also reiterated it remains committed to lowering inflation to the 4.5 percent target in 2017.

The minutes did not specify the extent to which the bank's inflationary expectations have increased, even while noting the disinflationary impact of the recession and fall in regulated prices.

Political pressure over the central bank to cut some of the world's highest interest rates to pull the economy out of a crippling recession have raised bets policymakers could lower borrowing costs this year.

The central bank kept its benchmark Selic rate at 14.25 percent at its March 2 meeting for the fifth straight time citing concerns over the global economy.

Since that meeting the Brazilian real has strengthened sharply and electricity rates dropped, easing pressure on inflation.

Consumer prices rose 10.36 percent in the 12 months through February, slowing from a 12-year high of 10.71 percent in January and below the lowest forecast in a Reuters poll. (Reporting by Alonso Soto and Silvio Cascione; Writing by Alonso Soto; Editing by W Simon)