Brazil had a decade of weak and largely incoherent monetary policy and another decade and a half of gradual change, attempts at stabilisation but recurring loss of control; it then adopted inflation targets in 1999, when its monetary instruments and arrangements were less than adequate, and had to move fast to get inflation targeting to work.
| Years | Targets and attainment | Classification |
| 1974-85 | central bank and Bank of Brazil together constitute the monetary authorities, with fiscal and developmental responsibilities as well as monetary policy; some indirect instruments but interest rates largely set by authorities, often at subsidised levels, in context of range of direct controls; extensive indexation (‘monetary correction’ at rates set by government, sometimes related to intended rate of depreciation); recurring fiscal dominance; attempts to control monetary growth rarely succeed; exchange rate heavily managed, i.e. repeatedly devalued in formal or irregular crawl, also major step devaluation 1979 | unstructured discretion UD |
| 1986-98 | separation of Bank of Brazil from central bank ends fiscal responsibilities of central bank; series of unsuccessful stabilisation plans including currency reforms and price and wage controls; repeated exchange rate adjustments; recurring fiscal dominance; continued indexation; gradual move to more indirect monetary instruments | loosely structured discretion LSD |
| 1999-2000 | exchange rate floated under pressure, wide converging inflation targets adopted and met; main monetary instrument is now primary interbank interest rate (SELIC) | loose converging inflation targeting LCIT |
| 2001-3 | inflation targets overshot by large margin, and inflation expectations go outside target range | loosely structured discretion LSD |
| 2004-23 | wide (and at first relatively high, but reduced gradually from 2019) inflation targets mostly met, except 2015 when regulated price inflation spiked and inflation expectations went temporarily above target band, and 2021-2 when higher fuel and commodity prices pushed inflation up with limited rise in medium-term expected inflation; exchange rate floating; central bank independence remains weak, with central bank liabilities including large amounts of government deposits and reverse repos, some reforms 2019-21; strong fiscal and monetary (but limited other) response to Covid-19; late 2022 new centre-left government, early 2023 failed uprising in favour of previous right-wing government elected late 2018 | loose inflation targeting LIT |
Selected IMF references: RED 1980 pp40-2, 98-9; RED 1984 pp49-55, 83; RED 1986 pp1-6, 48-50, 78, 87-8; RED 1989 pp1-6; RED 1991 pp1-4; RED 1995 pp1-9; SISA 1999 chVI; SR 2000 pp36-8; SR 2003 pp14-15; SI 2005 chII; SR 2005 pp23-5; SR 2015 AppIV; SI 2016 pp115-40; SR 2016 p39; SR 2017 pp7, 36; SR 2018 pp11, 26; SI 2019 pp13-32; SR 2020 pp57-61; SR 2021 pp7, 11, 20-2; SR 2023 pp7-9, 19-21, 39; SR 2024 p39.
Additional source: Bogdanski et al. (2000); Bogdanski et al (2002).
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Monetary Policy Frameworks 