(Adds details from hearing)
BRASILIA, Dec 9 (Reuters) - Brazilian inflation may accelerate further in the next few months, but policymakers will work to bring it back to target “as fast as possible,” central bank chief Alexandre Tombini said on Tuesday.
Speaking to lawmakers in Brasilia, Tombini said “it wouldn’t be a surprise” if 12-month inflation shoots above current levels in the next couple of months as a weaker real boosts the price of imported goods.
He reiterated, however, that the bank remains committed to lowering inflation, currently hovering at 6.56 percent on an annual basis, to its 4.5 percent target.
“The timeline we are working with is the end of 2016,” Tombini said.
Part of the decline in inflation is expected to come from a slower global economy and tighter fiscal controls in Brazil, he said, adding that the government’s 1.2 percent primary surplus goal for 2015 should have a “neutral to slightly contractionary” effect on prices.
Brazil’s currency, the real, has weakened by more than 9 percent against the dollar this year as declining terms of trade and stronger U.S. economic growth sap demand for local assets.
Tombini said he does not see a need to unwind the bank’s current stock of currency swaps in the short term. The instruments are used to provide local businesses with hedging protection against currency moves.
He said the central bank would continue to observe the currency market for the next two weeks before deciding on the next steps for the intervention program.
Tombini said he expects a gradual recovery in Brazil’s economy, which crawled out of a recession in the third quarter. A central bank poll estimates the economy will grow 0.18 percent in 2014 and 0.73 percent in 2015. (Reporting by Luciana Otoni, Writing by Walter Brandimarte and Asher Levine; Editing by Alden Bentley and Paul Simao)