(Recast with Volpon comments on fx and context)
By Alonso Soto and Silvio Cascione
BRASILIA, April 14 (Reuters) - Tony Volpon, nominee to Brazil’s central bank board, said on Tuesday he sees the local real currency near or already at its equilibrium level despite lingering uncertainties with the global economy.
In unusually frank comments by an official, Volpon, a former economist with Nomura Securities, said the bank should also work to lower the official inflation target range in the future.
Speaking at the Senate’s economic affairs committee, Volpon warned of heightened market volatility stemming from the normalization of interest rates in the United States.
“I believe that we are very near, if not already at the equilibrium level for the exchange rate, which will improve our external accounts,” Volpon told senators.
The real strengthened 1.40 percent to 3.0799 per dollar in midday trading due to a weaker dollar abroad and market optimism triggered by news that state-run oil company Petrobras will release its long-delayed annual results next week.
Nominated to be the central bank’s international affairs director, Volpon repeated the bank’s official line that recent interest rate increases are not enough to bring inflation to the center of the official target. The central bank aims to keep inflation at the center of the official range of between 2.5 and 6.5 percent.
Volpon and Otavio Damaso, who is nominated to be the bank’s regulation director, were ratified by the committee, but still need the rubber stamp of the Senate to take over their posts. (Reporting by Alonso Soto and Silvio Cascione; Editing by Chizu Nomiyama and Andrew Hay)