February 14, 2020 / 2:59 PM / 2 months ago

UPDATE 1-Brazil central bank head repeats pause in monetary easing is 'appropriate'

(Adds Campos Neto comment)

BRASILIA, Feb 14 (Reuters) - Brazil’s central bank on Friday republished a presentation by president Roberto Campos Neto to include the line that the bank’s rate-setting committee, known as Copom, “deems appropriate to interrupt the monetary easing process.”

Campos Neto’s presentation had been on the central bank’s website for over two hours before being revised to include the key line from Copom’s policy statement last week indicating that its rate cut to 4.25% could well be the last.

That sentence, subsequently repeated in the meeting minutes on Tuesday, surprised many observers who had expected the door to further easing to be left open a little wider, given the mounting signals that economic growth is losing steam.

The central bank said it was an “error” not to include that in the original presentation on its website.

Speaking in Sao Paulo, Campos Neto repeated Copom’s view that the current stage of the economic cycle requires a cautious approach to monetary policy, and that the next steps continue to depend on how economic activity, inflation risks and expectations unfold.

Campos Neto also said the economic fallout from the coronavirus outbreak remains unclear, with market participants’ estimates ranging from a 0.1 to 0.4 percentage point hit to gross domestic product.

“The economic impact is still uncertain, but it could be significant if the epidemic continues for a prolonged period,” Campos Neto said at the event, which was closed to the press, according to the presentation on the central bank’s website. (Reporting by Jamie McGeever and Camila Moreira; Writing by Jamie McGeever and Gabriela Mello; editing by John Stonestreet and Steve Orlofsky)

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