Latest news with #Galipolo
Reuters
28-04-2025
- Business
- Reuters
Brazil's central bank chief stresses data-driven approach to tightening cycle
April 28 (Reuters) - Brazil's central bank head stressed on Monday the data-dependent stance of policymakers in their tightening cycle, emphasizing the need for confidence that monetary policy is achieving the desired effects amid heightened uncertainties. "It is essential to gather sufficient and diverse data to build this level of confidence," said Gabriel Galipolo at an event hosted by conglomerate J. Safra in Sao Paulo. He highlighted that the central bank does not focus on a single variable, aiming to collect as much data as possible to ensure the monetary tightening is driving inflation toward the target. Galipolo emphasized that current inflation remains above the 3% official goal, and the domestic economy continues to show "very incipient" signs of cooling. Brazilian policymakers began tightening in September, so far raising interest rates by 375 basis points to 14.25%. In March, they signaled a further increase at the upcoming meeting next month, though smaller than the last three, each of which was 100 basis points. According to Galipolo, the communication issued after the latest policy decision "held up well over the last 40 days," with the same understanding remaining in force. He stressed policymakers' concerns over current inflation dynamics, unanchored inflation expectations, the lag in monetary policy, and increased uncertainties that require caution.
Reuters
19-03-2025
- Business
- Reuters
Brazil raises interest rates 100 bps, sees smaller hike ahead
BRASILIA, March 19 (Reuters) - Brazil's central bank raised interest rates by 100 basis points on Wednesday for the third consecutive time, sticking to previous guidance, and signaled a smaller rate hike at its next policy meeting as it monitors signs of an economic slowdown. The bank's rate-setting committee, known as Copom, lifted the benchmark Selic rate to 14.25% — a level last seen in 2016 — in a unanimous decision, meeting the expectations of all 37 economists polled by Reuters. "The Committee anticipates an adjustment of lower magnitude in the next meeting, if the scenario evolves as expected," policymakers wrote in a statement announcing their decision. More than the widely expected rate hike, markets were focused on the central bank's message about its next steps, now seen fully in the hands of its new governor, Gabriel Galipolo. Galipolo, a close ally of President Luiz Inacio Lula da Silva, took over in January from Roberto Campos Neto, who was a frequent target of criticism from the leftist leader. In the two monetary policy meetings held under his leadership so far, Galipolo has closely followed guidance set in December, with Campos Neto at the helm, which had penciled in 200 basis points of tightening in this year's first quarter. Attention has now centered on Galipolo's signals about bringing inflation back to target, as Lula grapples with low approval ratings and ramps up stimulus to spur consumption - at odds with the central bank's efforts to cool economic activity. The Brazilian central bank decision came on the same day the U.S. Federal Reserve held rates steady, assessing the new administration's policies before moving ahead with lower borrowing costs. Although Brazil's currency has gained more than 9% against the U.S. dollar so far this year, longer-term inflation expectations have continued to deteriorate, underscoring doubts about a sustained convergence toward the 3% official target. Brazil's economic activity, which policymakers have been closely tracking for signs of a slowdown, weakened more than expected last quarter. However, early data from this year still showed some resilience, as central bank officials noted in recent remarks. "The set of indicators on economic activity and labor market has been exhibiting strength, even though we observe signals that suggest an incipient moderation in growth," Copom said in its policy statement on Wednesday. Reflecting updated economic conditions, the central bank lowered its 2025 inflation forecast to 5.1%, from 5.2% projected in January. For the third quarter of 2026, the period most influenced by current monetary policy decisions, it now expects 12-month inflation of 3.9%, compared with a previous estimate of 4.0%.
Reuters
14-02-2025
- Business
- Reuters
Brazil's central bank chief says bank can't act preemptively on economic slowdown
SAO PAULO, Feb 14 (Reuters) - Brazil's central bank chief on Friday acknowledged market concerns about how the bank would react to an economic slowdown but said it could not act preemptively on something that has yet to materialize. Speaking at an event hosted by industry group Fiesp, Gabriel Galipolo said the bank had moved decisively, cutting rates by 100 basis points in January to 13.25% and signaling a similar cut for the next policy meeting in March. He said monetary tightening would have its intended effect and the central bank could not shy away from its inflation-fighting mandate. Policymakers want to ensure the data reflects an actual economic slowdown rather than short-term volatility, he added. "I think there is (market) uncertainty about what a reaction function might be from this slowdown," he said, acknowledging expectations that a slowdown could prompt some form of economic stimulus. Galipolo said acting preemptively is different when economic activity is clearly accelerating or slowing. "It's another thing to react to something the market sees or perceives as a possibility but that isn't actually there. It would be a mistake for monetary policy to act preemptively on a ghost," he added. Galipolo noted that asset markets have risen on relief that tariffs threatened by U.S. President Donald Trump have not been immediately imposed. He pointed out that there was initially widespread expectation that Trump's policies would be inflationary and that other currencies would depreciate against the U.S. dollar. The Brazilian currency , which lost more than 20% against the U.S. dollar in 2024, has risen nearly 8% year to date.
Yahoo
07-02-2025
- Business
- Yahoo
Brazil's Galipolo sees surge in crypto use, says 90% of flow tied to stablecoins
(Reuters) - Brazil's central bank chief Gabriel Galipolo said on Thursday that crypto asset usage in the country has surged over the past two to three years, with around 90% of the flow linked to stablecoins. Stablecoins are pegged to real-world assets, such as the U.S. dollar, and therefore fluctuate much less than other crypto assets like bitcoin. Speaking at a Bank for International Settlements event in Mexico City, Galipolo said policymakers see this trend as primarily driven by the use of cryptocurrencies as a means of payment, posing challenges for oversight and regulation. "Most of that is to buy things and to shop things from abroad," said Galipolo, emphasizing that this usage "maintains some kind of opaque vision for taxation or for money laundering." He also argued that Brazil's Drex is not fundamentally a central bank digital currency but rather an infrastructure aimed at improving credit with collateralized assets, in a context where local financing costs are high due to the limited use of guarantees. Drex will use distributed ledger technology to settle wholesale interbank transactions, while retail access will be based on tokenized bank deposits. After stressing that payment integration holds significant potential to facilitate cross-border transactions across the Americas, Galipolo also said Brazilian hugely popular instant payment system Pix could enable integration with international instant payment networks due to its programmability. Sign in to access your portfolio
Reuters
06-02-2025
- Business
- Reuters
Brazil's Galipolo sees surge in crypto use, says 90% of flow tied to stablecoins
Feb 6 (Reuters) - Brazil's central bank chief Gabriel Galipolo said on Thursday that crypto asset usage in the country has surged over the past two to three years, with around 90% of the flow linked to stablecoins. Stablecoins are pegged to real-world assets, such as the U.S. dollar, and therefore fluctuate much less than other crypto assets like bitcoin. Speaking at a Bank for International Settlements event in Mexico City, Galipolo said policymakers see this trend as primarily driven by the use of cryptocurrencies as a means of payment, posing challenges for oversight and regulation. "Most of that is to buy things and to shop things from abroad," said Galipolo, emphasizing that this usage "maintains some kind of opaque vision for taxation or for money laundering." He also argued that Brazil's Drex is not fundamentally a central bank digital currency but rather an infrastructure aimed at improving credit with collateralized assets, in a context where local financing costs are high due to the limited use of guarantees. Drex will use distributed ledger technology to settle wholesale interbank transactions, while retail access will be based on tokenized bank deposits. After stressing that payment integration holds significant potential to facilitate cross-border transactions across the Americas, Galipolo also said Brazilian hugely popular instant payment system Pix could enable integration with international instant payment networks due to its programmability.
