SAO PAULO (Reuters) -Brazil's central bank will do "whatever is necessary" to control inflation, monetary policy director Gabriel Galipolo said on Thursday, adding that risks appeared to be to the upside of its 3% target.
At an event in Belo Horizonte, Galipolo said minutes from the July 30-31 meeting of the central bank's rate-setting committee, known as Copom, made it clear that all policymakers are willing to do whatever it takes to control inflation, including those appointed by rate-hike averse President Luiz Inacio Lula da Silva.
Galipolo was appointed by Lula and previously worked as Finance Minister Fernando Haddad's right hand as his executive-secretary.
Copom said in the meeting's minutes that its members would be open to raising rates if needed, but Galipolo said that this should not be seen as guidance on its next moves.
Galipolo said there has been no signal from Copom on what it will decide in future meetings, as the monetary authority is still "totally data-dependent."
Inflation projections in Latin America's largest economy have been climbing and now stand at 4.12% for 2024 in the central bank's latest weekly survey of economists.
The current scenario is still very "uncomfortable" for the central bank to reach its 3% inflation target, Galipolo said, especially amid global uncertainties, de-anchored inflation expectations and positive surprises in economic growth.
Galipolo said he now sees Copom's risk balance as asymmetric, with upside risks for inflation. He also underscored higher-than-normal market volatility, highlighting the impact on inflation from foreign exchange moves.
Still, Galipolo said it would be a mistake to establish a "mechanical" relationship between currency moves and monetary policy.
Brazil's real has fallen nearly 13% so far in 2024, pressured by a strong U.S. dollar and by domestic fiscal concerns.