People are seen buying from a supply centre (CEASA) in Brasilia, Brazil May 9, 2023. REUTERS/Adriano Machado

BRASILIA (Reuters) -Brazil's central bank remains dissatisfied with progress toward bringing inflation back to its target, its governor said on Monday, stressing that policymakers will maintain a data-dependent approach.

Speaking at an event hosted by banking lobby Febraban, Gabriel Galipolo said the bank is "clearly moving in the desired direction to fulfill our mandate" of returning inflation to target, but emphasized that there is still work to be done.

"We are still dissatisfied because we are not yet where we would like to be, which is why interest rates remain at a restrictive level," he said.

"The central bank made it very clear that it will do whatever is necessary to fulfill its mandate," he added.

Earlier in November, the central bank held interest rates steady for the third consecutive meeting at 15%, the highest level in nearly 20 years, and signaled it is now confident that keeping them unchanged for a prolonged period is enough to guide inflation back to the 3% official goal.

BANCO MASTER LIQUIDATION

Galipolo also said on Monday the institution "followed the rulebook" and acted strictly in line with its legal mandate on financial stability following the recent liquidation of Banco Master.

The central bank tied the move to a "severe liquidity crisis" at the Master conglomerate, a "sharp deterioration" in its finances, and "serious violations" of financial-system rules.

Galipolo praised the central bank's technical staff and "the diligence of the whole team," especially the supervision department led by director Ailton Aquino.

Master, which had grown rapidly through an aggressive strategy built on high-yield debt sold through investment platforms, had struggled in recent months with mounting liquidity pressures.

(Reporting by Marcela Ayres; editing by Gabriel Araujo)