U.S. election outcome adds market uncertainty, says Brazil's Central Bank

The outcome of the U.S. presidential elections has added uncertainty to the plaguing financial markets, the president of the Central Bank of Brazil said on Monday.

"The new scenario has raised international interest rates .... The threat of this scenario is the reversion of the capital flows of emerging economies," Ilan Goldfajn said at a video conference, as part of a seminar organized by the Getulio Vargas Foundation in Rio de Janeiro.

Shortly after Republican candidate Donald Trump defeated his Democratic rival Hillary Clinton in the Nov. 8 elections, major money markets experienced jitters, but quickly calmed.

While it is too soon to tell how Trump's incoming administration will affect the U.S. and global economies, the bank is taking precautionary measures to combat inflation and bolster confidence, said Goldfajn.

"We have tools at our disposal that are going in the right direction to strengthen our foundations, and we have a coherent economic policy," he said.

"The monetary policy has been effective," he said, adding that the inflation forecast for 2017 has dipped to below 5 percent, and that for 2018 to 4.5 percent.

Brazil's finance department, meanwhile, lowered its growth forecast for 2017 from 1.6 percent to 1 percent, and adjusted this year's projected economic contraction from 3 percent to 3.5 percent. Endi