Brazil’s central bank decision:
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Kept the benchmark Selic rate unchanged at 15.0% in a unanimous decision (in line with Reuters poll).
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Removed reference to “continuation of the interruption” of the hiking cycle.
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Said it will remain vigilant and assess whether keeping rates at the current level for a prolonged period is sufficient to bring inflation back to target.
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Stressed that future policy steps can be adjusted and that it will not hesitate to resume rate hikes if needed.
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Highlighted monitoring of U.S. tariff announcements affecting Brazil and domestic fiscal policy developments impacting monetary conditions and financial assets.
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Noted inflation expectations remain de-anchored, inflation projections are high, and pressures persist from resilient economic activity and the labour market.
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Emphasised that de-anchored expectations demand a significantly contractionary policy stance for an extended period.
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Cited an uncertain global environment due to U.S. policy and economic outlook.
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Observed moderation in growth indicators as expected, but with continued strength in the labour market.
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Reported headline and underlying inflation remain above target.
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Concluded that risks to the inflation outlook remain elevated on both the upside and downside.
This article was written by Eamonn Sheridan at investinglive.com.
