BRASILIA, Sept 29 (Reuters) - Brazilian central bank director Carlos Hamilton Araujo on Monday signaled that policymakers could use monetary policy to ease the effects a weaker real could have on inflation.
Speaking to reporters in Brasilia, Araujo said that the bank is paying attention to the effects the weaker currency could have on inflation, but stressed that the pass-through is lower now than in previous years.
The real sank over 2 percent early on Monday to its weakest level in nearly six years as investors grew jittery over growing re-election chances for President Dilma Rousseff. The market blames Rousseff’s interventionist policies for driving the economy into recession.
When asked what else the central bank could do to mitigate exchange rate volatility, Araujo said that the bank’s daily intervention program has worked well but declined to elaborate further. (Reporting by Alonso Soto; Editing by Chizu Nomiyama)