Brazil | BCB is concerned with the impact of fiscal uncertainty and "non-economic events"

The BCB sees 2016 inflation at 6.2%/6.3%, in line with its goal for the period. Moreover, it forecasts 2017 inflation to reach 4.8%/4.9%, which we see as sufficiently close to the 4.5% level it wants to make inflation to converge to. If our view is correct, and if fiscal uncertainty and "non-economic events" allow it, the Selic rate will be left unchanged in January.

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