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Brazil's government recently decided to maintain the country's inflation goal at 3%, and now private economists are anticipating deeper monetary easing this year.

They are also foreseeing improved inflation prospects until 2026, a weekly central bank poll showed on Monday, reported Reuters.

Last week, it was decided that Brazil will continue to pursue a 3% inflation target. It is a decision that is likely to help the central bank come up with a cycle of interest rate cuts as soon as next month, according to Bloomberg.

Central Bank President Roberto Campos Neto, Planning Minister Simone Tebet and Finance Minister Fernando Haddad make up the national monetary council. They had also decided to do away with specific objectives for each calendar year and introduce a constant and medium-term inflation goal instead.

President Luiz Inacio Lula da Silva, who had previously called for a less strict 4.5% target, had recently repeated his criticism of inflation objectives that he considers too low. The leftist President had said that Brazil "doesn't need such a rigid goal."

Still, he let the economic team carte blanche to make their decision, Haddad shared.

Lula's criticism and remarks led to the deviation of long-term inflation expectations from official targets, seen as concerning by the central bank. It called the development a rationale for maintaining interest rates at their peak in about six years.

Brazil's central bank is autonomous, but the institution follows targets that are set by the monetary council. It is dominated by ministers who are appointed by the president, as per Yahoo! Finance.

The decision by the council has prompted a change in the outlook of private economists who were surveyed by the central bank. They now anticipate that the country's benchmark interest rate will end the year at 12%. The interest rate is down from the earlier estimate of 12.25%.

Three consecutive cuts of 50 basis points by year-end are predicted to follow the first interest rate cut of 25 basis points in August.

The poll also revealed better inflation expectations for 2023 at 4.98%. It is in comparison to the 3.25% official target.

On Monday, at the beginning of trading, the country's currency, Brazilian Real, experienced a slight strengthening against the U.S. dollar. The benchmark stock index also rose around 0.9%.

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