6 Apr 2015
Brazil on its way to tighten its monetary policy – Rabobank
FXStreet (Edinburgh) - Strategists at Rabobank believe the Brazilian central bank (BCB) could lift the Selic rates up to 13.50% in 2015.
Key Quotes
“Returning to price pressures, Brazil’s inflation outlook continues to worsen and expectations are now for inflation north of 8% this year”.
“During the QIR’s post-release interview, BCB Director Awazu Pereira argued insistently that there’s nothing but the 4.5% (the BCB target) to think about”.
“Although the adjustment is broadly concentrated in the first quarter of this year, the second round effects are being contained by a “vigilant” central bank”.
“In terms of policy rates, we expect another 75bps of tightening (50bps on April 29 followed by 25bps on June 3) to take the SELIC up to 13.50% this year”.
Key Quotes
“Returning to price pressures, Brazil’s inflation outlook continues to worsen and expectations are now for inflation north of 8% this year”.
“During the QIR’s post-release interview, BCB Director Awazu Pereira argued insistently that there’s nothing but the 4.5% (the BCB target) to think about”.
“Although the adjustment is broadly concentrated in the first quarter of this year, the second round effects are being contained by a “vigilant” central bank”.
“In terms of policy rates, we expect another 75bps of tightening (50bps on April 29 followed by 25bps on June 3) to take the SELIC up to 13.50% this year”.