Monetary policy meeting

Monetary policy meeting latest publications

March 10, 2016

Brazil | Copom in wait-and-see mode

Even though inflation forecasts were revised upwards, the tone of the monetary policy minutes was not hawkish. The Copom refrained from signalling that either a tightening or an easing of monetary conditions is imminent. Hence, the minutes reinforced the view that the Selic rate will remain unchanged for some further time (…

March 3, 2016

Brazil | No changes in sight for interest rates

The Monetary Policy Committee (Copom) decided to leave the Selic rate at 14.25%. The fact that two members of the Committee favored a 50bp hike and the lack of changes in the communique suggest that an eventual easing of monetary conditions is not imminent.

January 28, 2016

Brazil | A more dovish Copom redirects its focus to the global environment

The minutes of last week's monetary policy meeting show that Copom is now more concerned about the evolution of the Chinese economy and oil markets, which "can strengthen the scenario of convergence of inflation to the 4.5% target in 2017". The more dovish tone used by the monetary authority supports our view that the Selic…

January 21, 2016

Brazil | Copom refrains from beginning a new tightening cycle

In line with our view, but in contrast with the market consensus, the Copom decided to keep interest rates unchanged in an environment marked by political pressure against a further monetary tightening, the worsening of the prospects for economic activity and "domestic and mainly external uncertainties". Looking forward, th…

December 3, 2015

Brazil | The risk of further monetary tightening raises as the fiscal situation worsens

The COPOM suggested that it will increase interest rates if the fiscal situation deteriorates further, which is more likely now after the launching of the impeachment process of President Rousseff. Anyway, our base scenario is for a stable Selic ahead, which was supported by the COPOM's forecast of inflation around the targ…

May 7, 2015

Brazil | We expect another SELIC hike in June

The minutes of last week's monetary policy meeting suggest that the tightening cycle is not over yet. According to the COPOM, the efforts to drive inflation down to 4.5% by the end of 2016 are "still not sufficient" and therefore monetary policy must remain "vigilant". We take today's minutes as a sign that the SELIC will…

April 30, 2015

Brazil | Another 50bp hike in the SELIC to rein in 2016 inflation expectations

The Monetary Policy Committee (COPOM) decided to adjust up the SELIC rate by 50bp, as in its three previous meetings. By maintaining the adjustment pace unchanged in spite of the signs of sharp deceleration in economic activity, the monetary authority tries to convince markets that it will be able to make inflation to conve…

January 29, 2015

Monetary tightening in Brazil: "still not enough"

The minutes of the last week's monetary policy meeting, in which the SELIC rate was hiked by 50bp to 12.25%, confirmed our view that the ongoing adjustment of monetary conditions will continue in the short-term. We expect a 25bp hike in the next monetary policy meeting in March, but another 50bp adjustment should not come a…