FXStreet (Edinburgh) – The research team at BBH assessed the recent decision by the Brazilian central bank to leave intact its Selic rate.
Key Quotes
“Brazil’s COPOM announced its decision late last night and kept rates steady at 14.25% as expected. A very small minority looks for a 25 bp hike”.
“The last move was a 50 bp hike in July, and it has hiked at every meeting since last October”.
“COPOM said rates would remain at the current 14.25% for a “prolonged period” and stressed that past tightening will be enough to bring inflation down to the 4.5% target by the end of 2016”.
“With inflation and inflation expectations still rising, we are not convinced that we’ve seen the end of the tightening cycle”.
“Elsewhere, the fiscal outlook continues to darken, and we think the case for Brazil losing its investment grade rating keeps getting stronger and stronger”.
(Market News Provided by FXstreet)