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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 (…

September 10, 2015

Brazil | Copom sees 2016 inflation converging to the target, but also important risks

The monetary policy minutes revealed that the COPOM is now seeing inflation converging to 4.5% in 2016, which explains its decision to leave the Selic unchanged at 14.25%. However, it highlighted that some upside risks (mainly fiscal policy deterioration and exchange rate depreciation) require the monetary authority to rema…

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…

December 11, 2014

COPOM focuses at taking inflation to the 4.5% target by 2016

The minutes of last week's monetary policy meeting in which the SELIC rate was hiked by 50bp to 11.75% show that the plan of the Monetary Policy Committee (COPOM) is to take inflation back to the 4.5% target by 2016. To do so the monetary authority seems to count on more supportive fiscal and quasi-fiscal policies from now …

December 4, 2014

Monetary tightening continues at a faster pace, but it should soon come to an end

In its last meeting in 2014, the Monetary Policy Committee (COPOM) decided to hike the SELIC rate by 50bp to 11.75%. The move surprised part of the market -including us- which expected a 25bp increase, same pace as in the previous meeting. In spite of the faster pace, which we see as a move by the monetary authority to try …

November 6, 2014

The upcoming monetary tightening will also depend on the tone of fiscal policy

The minutes of last week's monetary policy meeting, in which the BCB hiked the SELIC by 25bp to 11.25%, suggested that not only the exchange rate but also the tone of fiscal policy and the pressures coming from administered prices will determine the pace and the final magnitude of the monetary tightening cycle that started …

September 11, 2014

COPOM sees lower inflationary pressures in the short-term

The minutes of last week's monetary policy meeting brought no exciting news. The messages included in the previous official communication suggesting the SELIC rate will remain at 11.0% for some time were maintained unchanged. However, it is worth noting that the Monetary Policy Committee (COPOM) now sees lower inflationary …

September 4, 2014

Stable Selic for some time

As at its two previous meetings, the Monetary Policy Committee (Copom) unanimously decided to leave the Selic rate unchanged at 11.0%. In addition, the slight adjustment in the accompanying statement reinforced the perspectives that policy rates will remain at the current level for some time, at least until the end of the …