SANTIAGO, Jan 30 (Reuters) - There is room for additional cuts to Brazil’s benchmark interest rate, bringing them towards a neutral level, central bank chief Ilan Goldfajn told Chilean daily Pulso in an interview published on Monday.
Brazil’s central bank surprised markets with a larger-than-expected 75-basis-points cut to its benchmark Selic rate to 13.00 percent on Jan. 11, as the worst recession in Brazilian history threatens to stretch into a third year.
“We think there is room to cut the interest rate towards a neutral interest rate, which is lower than what we have today,” Goldfajn said. “So we know what direction (to move the rate) and that there is room to do so, but exactly what that number is, we don’t know.”
Asked about the Brazilian real currency, Goldfajn said he “was not concerned”.
The recession, the worst in Brazilian history, has left millions unemployed and bankrupted hundreds of companies, raising pressure on Goldfajn to lower rates, which rank among the world’s highest.
Goldfajn said there had been no signs yet of a shift in capital inflows to Brazil following the election of U.S. President Donald Trump.
“We haven’t felt it, but we’re in a moment of uncertainty because we don’t know exactly what the impact will be of the new policies,” Goldfajn said. (Reporting by Anthony Esposito; Editing by Chizu Nomiyama)