Brazil's central bank on Tuesday flagged caution over the impact of steeper U.S. trade tariffs, reaffirming its commitment to a policy stance aimed at lowering inflation expectations after signaling interest rates will remain on hold for long.

Brazil’s central bank said it will keep a cautious stance on monetary policy as it works to tame above-target inflation, warning of increased uncertainty caused by US President Donald Trump’s trade tariffs.

Brazil’s central bank signalled on Tuesday it is sticking to a cautious monetary policy stance as it faces the possible fallout from steep new US tariffs and vowed to keep anchoring inflation expectations.

Brazil's inflation remained well above the central bank's target range in its mid-July reading, official data showed on Friday, as policymakers gather next week for a meeting at which they are widely expected to hold interest rates at a two-decade high.