Brazil vows to hit 3% inflation target at IMF, World Bank meetings
Central bank committed to 3% inflation target despite current 4.47% rate
Inflation driven by stronger-than-expected economic activity
Board members emphasize data-dependence and no guidance on next steps
Markets predict 92% chance of 50 basis point hike next month
Rewrites throughout
Oct 24 (Reuters) -Four members of Brazil's nine-person interest rate-setting board attended several events in Washington this week with a clear, well-aligned message: they are committed to bringing inflation back to the bank's 3% target.
Speaking at forums hosted by investment banks on the sidelines of the International Monetary Fund and World Bank annual meetings, the policymakers voiced concern with unanchored consumer price expectations, but vowed to pursue the target.
"More important than anything is the firm commitment to the target of 3%, if I were to summarize everything. That is the big takeaway of what we are doing," economic policy director Diogo Guillen told an event hosted by Citi C.N on Thursday.
He later repeated the message at a JPMorgan JPM.N meeting.
Brazil's central bank delivered a unanimous 25-basis-point increase to its benchmark interest rate in September, bringing it to 10.75%, and is expected to speed up the pace of tightening next month.
The monetary authority has been trying to tackle a challenging inflation outlook driven by stronger-than-expected economic activity, while consumer price forecasts for this year and the next remain above the target.
"There is only one target, which is 3%. This commitment is unshakeable," the bank's director of financial system organization, Renato Gomes, said at an HSBC HSBA.L event.
Both board members also noted the committee has been data-dependent and decided not to provide any guidance about its next steps, despite market participants indicating that the bank is all but certain to speed up its pace of hikes in November.
Consumer price figures for the first half of October on Thursday showed Brazil's 12-month inflation at 4.47%, just shy from the upper end of the bank's 1.5%-4.5% target range.
Guillen and Gomes reiterated, however, that even though the target includes a tolerance margin of 1.5 percentage points, the bank is focused on putting inflation exactly at 3%.
They echoed remarks delivered on Wednesday by central bank Governor Roberto Campos Neto and fellow board member Paulo Picchetti, who spoke at events hosted by UBS and XP XP.O, respectively.
Campos Neto said the board would do what is necessary to reach its inflation target, while Picchetti emphasized their clear commitment to lowering consumer prices back to the goal.
Markets price in a 92% chance that the central bank will hike borrowing costs by 50 basis points next month. The other 8% point to an even larger increase of 75 basis points. BCBWATCH
Reporting by Bernardo Caram, Luana Maria Benedito, Fernando Cardoso, Andre Romani; writing by Gabriel Araujo; Editing by Christina Fincher and Lisa Shumaker
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