Brazil's Central Bank prioritizes inflation over exchange rate stabilization, study finds.
The Central Bank of Brazil focused on stabilizing inflation, smoothing interest rates, and managing the exchange rate from 2000 to 2013. A model showed that inflation stabilization was the top priority, followed by interest rate smoothing, exchange rate management, and then output stabilization. The Central Bank seemed to fear letting the exchange rate float freely. To improve, less intervention in the exchange rate market is suggested.