June 30, 2016 / 12:32 PM / 2 years ago

Brazil to cut 2018 inflation target below 4.5 pct -source

BRASILIA, June 30 (Reuters) - The Brazilian government will reduce its inflation target to between 4.25 and 4 percent in 2018 to show greater commitment to ending years of high inflation, a government official told Reuters on Thursday.

The National Monetary Council, the country’s highest economic policy body formed by the central bank chief and the planning and finance ministers, will announce the new target later on Thursday. The target will keep the tolerance range of 1.5 percentage points either way, the official said.

Brazil has kept its inflation target at 4.5 percent, one of the highest in the region, since 2005. For 2017 the target remains at 4.5 percent.

“This is a big effort to contain the second-round effects of the price readjustments of 2015,” said the official who asked for anonymity because he is not allowed to speak publicly.

Interim President Michel Temer will decide on the final figure once the economic team makes the proposal for a lower target later on Thursday, a presidential aide said.

The finance ministry press office declined to comment. (Reporting by Patricia Duarte; Writing by Alonso Soto; Editing by Chizu Nomiyama)

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