Brazil's incoming central bank chief stresses 'various paths' to achieve inflation target
Adds context in paragraphs 4-7, further quotes in paragraphs 8-10
BRASILIA, Nov 13 (Reuters) -Brazil's incoming central bank chief GabrielGalipolo said on Wednesday that pursuing its 3% inflation target is non-negotiable for policymakers, but that there are various paths to achieve that goal.
Speaking at an event hosted by Bradesco Asset Management, Galipolo, who is currently the central bank's director of monetary policy, but who willtake over as governor in January, noted that recent data has shown the Brazilian economy's resilience.
He emphasized that the central bank will continue to assess data on a meeting-by-meeting basis, without providing guidance or reacting mechanically to variables.
The central bankaccelerated its monetary tightening with a 50-basis-point interest rate hike last week, pushing rates to 11.25%.
In the minutes of the decision, policymakers stressed that further deterioration in inflation expectations could prolong the monetary tightening cycle.
Annual inflation in Latin America's largest economy reached 4.76% in October.
Even with the central bank hiking rates, economists have raised their inflation forecasts through 2026 due to stronger-than-expected economic activity, a tight labor market and a weaker currency.
The recent depreciation of the Brazilian real has been driven by a combination of local fiscal concerns and a stronger U.S. dollar after the nation's presidential election.
With the market awaiting new fiscal measures to support the real and reduce long-term interest rates, Galipolo acknowledged that changes often take longer than the market would prefer, but said he favors the "pains of democracy."
After the central bank sold all $4 billion offered in two dollar-denominated auctions with repurchase agreements on Wednesday, Galipolo said the intervention was related to year-end seasonality, when there is usually "additional demand that tends to cause a bit of stress on the exchange-rate coupon."
"I think the action was well understood, well received, and served its purpose," he added.
Reporting by Marcela Ayres, editing by Deepa Babington
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