By Marcela Ayres and Isabel Versiani
BRASILIA (Reuters) - Brazil's central bank is studying recent data showing inflation is somewhat above expectations to see if there is room for a "residual" cut in interest rates, its president Roberto Campos Neto told Reuters.
In an interview late on Wednesday, he said he expected the bank's growth projections to improve as pandemic emergency income relief payments and credit for small and medium companies continued to spur improved growth.
"What I have said is that we have to understand the impact of the growth on inflation," he said when asked if there was still room for a further reduction in the benchmark Selic rate.
"The two tend to go in the same direction, though we understand that we have such a big hiatus that growth is able to return faster without generating a lot of inflation," he said.
On June 17, when it cut the rate by 75 basis points to a record low of 2.25%, the central bank indicated that the space remaining for further monetary stimulus was uncertain and should be small, even with inflation expectations comfortably below the 4% target for this year and 3.75% next year.
"We already have some marginal inflation data, albeit very residual, showing for the first time that it is slightly above expectations," Campos Neto said.