Brazil: All eyes on the COPOM – Deutsche Bank

Research Team at Deutsche Bank, expect the COPOM to keep the SELIC overnight interest rate target unchanged at 14.25%, which is also the market consensus.

Key Quotes                               

“Despite the ongoing recession, inflation remains significantly above the target and a rate cut at this juncture would not be consistent with the hawkish stance embraced by newly-appointed BCB President Ilan Goldfajn. We expect the communiqué to repeat that current and expected inflation levels do not yet allow the central bank to ease monetary policy, in line with the Inflation Report published at the end of June.

Apart from the BCB decision on rates, the good news is that from now on the second leg of the COPOM meeting on Wednesdays will begin earlier (at 2:30pm instead of after 4:00pm), so the announcement will not be published as late as it used to be (although it will still happen after markets close).”