The comments came in minutes from the bank’s latest policy meeting, where officials approved a fourth consecutive 25 basis point rate cut, bringing the benchmark Selic rate down to 14.00%.
Despite the easing, policymakers gave no indication of whether further rate reductions are planned, stressing that future decisions will depend on incoming economic data and developments affecting the inflation outlook.
The bank said monetary policy must remain sufficiently restrictive to bring inflation back toward its 3% target, while officials pledged to continue monitoring economic conditions before determining their next steps.
Policymakers also warned that temporary supply shocks could generate broader inflationary effects, saying the central bank would respond firmly if such pressures begin to spread through the economy.
Economic indicators, meanwhile, showed activity losing momentum as the economy moved from the first into the second quarter. The slowdown was visible across both supply and demand, which policymakers said was necessary to help bring inflation under control.
The minutes also pointed to improvements in inflation trends, with both headline inflation and underlying measures showing signs of moderation compared with June, when officials had expressed concern over rising price pressures.
However, policymakers remained concerned about longer-term inflation expectations, saying they were closely watching a recent deterioration and assessing the factors responsible for the shift.
The central bank said sustained and disciplined monetary policy would be important in restoring confidence in inflation expectations and helping return price growth to target at a lower economic cost.
Goodness Anunobi
