Ashton Whiteley – Brazilian central bank chief says current level of trade tensions will have limited impact on global economic growth.
SHANGHAI, CHINA, April 13, 2018 /24-7PressRelease/ — Ilan Goldfajn, Brazil’s central bank chief, has downplayed the recent upset in Latin American markets saying that rising trade tensions between China and the United States are unlikely to hinder global economic expansion.
Ashton Whiteley says that emerging markets have sold off this week amid China’s announcement of imminent imposition of tariffs on US goods. These are in response to US President Donald Trump’s metals tariffs imposed on China last month. Goldfajn stated that while he anticipates the current trade tensions to cause a level of uncertainty in the short term, this will be diffused as new trade deals emerge.
Goldfajn stated that only a larger trade conflict would have a negative impact on global economic growth and as long as new deals are reached, global trade will be maintained.
Ashton Whiteley analysts say that uncertainty surrounding the global outlook is one of a number of factors the Brazilian central bank is considering as it comes to a decision on when to conclude a cycle of interest rate reductions that have brought interest rates in the country to a record low of 6.5 percent.
After indicating that it may be coming to the end of its monetary easing a little over a month ago, Brazil’s central bank surprised the markets when it stated that it would probably reduce the benchmark rate by another 25 basis points in May.
Ashton Whiteley analysts say elevated rates of unemployment and persistent idle capacity have kept inflation at less than the official target range and reduced inflation forecasts for the coming years.
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