A Second 25-Basis Point Brazilian Selic Rate Cut
November 30, 2016
The Central Bank of Brazil’s Selic Rate was reduced at a second straight meeting by 25 basis points to 13.75%. A similar reduction on October 19 had constituted a trend change. Previously between October 2014 and July 2015, Brazilian monetary policymakers had increased interest rates by 325 basis points from 11.0% to 14.25%. Officials on Copom, the central bank’s policy committee, published a statement that
- Revised projected GDP growth for 2016 and 2017 lower;
- Said “the economic recovery may be further delayed and be more gradual than previously anticipated;”
- Expressed concern that “the increase in asset price volatility indicates a possible end to the benign environment for emerging economies;”
- Has some encouraging things to say about prospects for lower inflation but also identifies inflation risks to be watched.
- Concludes that “the magnitude of monetary easing and a possible speeding up of its pace will depend on inflation forecasts and expectations, and on the evolution of the aforementioned risk factors.
Copyright 2016, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Central Bank of Brazil
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