UPDATE 1-Brazil's National Monetary Council sets 2024 inflation target at 3.00%

·2 min read

(New throughout, adds Economy Ministry comments on decision, context)

By Jamie McGeever

BRASILIA, June 24 (Reuters) - Brazil's National Monetary Council (CMN) on Thursday set the central bank's 2024 inflation target at 3.00%, another decline from preceding years' goals, highlighting policymakers' determination to keep inflation under control.

The CMN is Brazil's highest economic policy body, comprised of Economy Minister Paulo Guedes, central bank chief Roberto Campos Neto and special secretary to the Economy Ministry Bruno Funchal.

The Economy Ministry said the 3.00% target for 2024, with a tolerance margin of 1.5 percentage points on either side, will reduce uncertainty and allow households, companies and the government to plan better for the future.

"The 0.25 percentage point reduction from the 2023 target is consistent with the high credibility of monetary policy," the Economy Ministry said in a statement, adding that inflation expectations have fallen "substantially" in line with the annual targets.

This year's goal was maintained at 3.75%, next year's at 3.50% and the following year's at 3.25%. The Economy Ministry statement said these goals are credible.

Annual inflation in Brazil is running above 8%. The market consensus according to a weekly central bank survey of around 100 economists is that it will end this year at 5.8%, above the upper limit of the central bank's target range.

Campos Neto said on Thursday that the central bank will use all the tools at its disposal to ensure its 2022 inflation goal is met.

Last week, the central bank raised its benchmark Selic rate by 75 basis points for a third time to 4.25%. Minutes of the meeting showed that policymakers discussed an even bigger increase and could make a bolder move in August. (Reporting by Jamie McGeever; Editing by David Gregorio)

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