SAO PAULO/BRASILIA, June 18 - Brazil’s Finance Minister Dario Durigan said on Thursday that there remains space for additional cuts to interest rates in the country, but he underlined that any such moves are the central bank’s decision to make.
Durigan’s remarks came a day after the central bank reduced its policy rate for the third consecutive meeting to 14.25% and signaled an open stance on future steps. The central bank reduced rates while also acknowledging a deteriorating inflation outlook, increasing its projections and warning of rising upside risks to consumer prices.
The finance minister described actions taken at the government level to help keep inflation in check. He said the administration is withholding 23 billion reais from the budget as a demonstration of fiscal tightening that should support monetary policy objectives.
On the question of how inflation is measured, Durigan reiterated that although he has previously supported a review of the methodology used to calculate inflation to align it more closely with current household spending patterns, he respects the official readings. He said he has never advocated for changing the index simply because the number is rising and framed his prior comments as support for studies to modernize the methodology rather than immediate alterations to the index.
Recent data show annual inflation in Brazil accelerated to 4.72% in May, putting the rate above the central bank’s 3% target. In its latest projections, the central bank indicated that inflation is likely to climb further, estimating a full-year rate of 5.2%.
Durigan’s comments emphasize a division of responsibilities: the government will pursue measures it deems supportive of price stability while leaving decisions on interest rates to the central bank. The exchange rate noted in reporting was $1 = 5.1052 reais.
Clear summary
Brazil’s finance minister says there is room for more rate cuts but the central bank will decide next steps; the government is constraining spending by blocking 23 billion reais in the budget and supports methodological reviews of inflation measurement while respecting current readings. Annual inflation rose to 4.72% in May and the central bank projects 5.2% for the year.