Luiz Eduardo Melin, international affairs chief of Brazil’s finance ministry, stated last month that, as there are no immediate concerns about inflation accelerating, Brazil must adjust its inflation targeting policy.
Brazil is near the bottom of it target range of 4.5%. Melin said: “We have to calibrate our inflation cares and the way we manifest that concern as we are heading to the bottom of the target.”
Brazil’s benchmark IPCA inflation index rose 3.3% in the 12 months ending October 31, the lowest rate since May 1999. Prices are expected to rise 4.1% in the next 12 months. The government will also meet its spending and debt reduction targets for 2006.