Central Bank of Brazil

Central Bank of Brazil

April 27, 2016

The Brazilian Selic rate was retained at 14.25%.  It’s been at that level since a 50-basis point hike at the end of last July, which culminated 325 basis points of increases since October 2014.  The tightening was prompted by a huge inflation overshoot relative to the 4.5% target, fueled by real depreciation.  Although inflation has […] More

Central Bank of Brazil

March 3, 2016

Brazil is gripped by an extreme case of stagflation.  In all likelihood, GDP will post a second straight contraction this year of more than 3.0% despite Brazil’s hosting of the summer Olympic Games.  And CPI inflation was 10.7% in January and rising, thanks to the pass-through of real depreciation.  The Zika virus has pressed the […] More

Brazilian Central Bank Flinches

January 21, 2016

The rhetoric late last year from Copom, the monetary policy committee at the Central Bank of Brazil, had encouraged market players to expect another tightening of the Selic interest rate, which from April 2013 to July 2015 had been lifted from 7.25% to 14.25%.  Even though 14.25% represents the highest Selic rate level since October […] More

Central Bank of Brazil Tightens Monetary Policy Again in Face of Accelerating Inflation and Contracting GDP

July 29, 2015

Copom, Brazil’s monetary policy committee, started raising its short-term Selic interest rate from a base of 7.25% in April 2013.  Inflation then of 6.6% was above target and threatening to send inflation expectations upward.  Over the ensuing year to April 2014, the Selic rate was increased by 3.75% to 11%, and policy tightening was put […] More

Central Bank of Brazil

April 29, 2015

As expected, the policymaking committee unanimously agreed to another hike of the Selic interest rate, this time to 13.25% from 12.75%.  It has cumulatively been increased by 150 basis points in 2015, 550 bps since April 2013, and 600 bps since the current tightening cycle began in the spring of 2013.  Brazil’s inflation rate, now […] More

Central Bank of Brazil Tightens Credit Again

March 4, 2015

The monetary policy committee, known as Copom, raised the Selic interest rate by another 50 basis points, matching increases made on January 20 and December 3rd.  There also was a 25-basis point hike last October and 375 basis points of tightening between April 2013 and April 2014.  The new Selic rate level of 12.75% will […] More

Central Bank of Brazil

January 22, 2015

Brazil has several sizable economic imbalances.  Inflation of 6.4% in the year to December is hovering around the top of the 2.5-6.5% target range in spite of the dive in global oil prices.  GDP contracted marginally between the third quarters of 2013 and 3Q14.  The current account and fiscal deficits are excessive, constituting around 4% […] More

Central Bank of Brazil Selic Interest Rate Hiked to 11.75% from 11.25%

December 3, 2014

Brazil has been experiencing minimal growth but also inflation that’s higher than the 2.5-6.5% target.  The central bank policy focus since April 2013 has been countering inflation.  After rising 375 basis points from 7.25% to 11.0% in the ensuing year, monetary policy paused for several months until a 25-basis point increase on October 29 to […] More

Central Bank of Brazil Keeps 11% Selic Interest Rate

July 17, 2014

The 184th meeting of Copom, Brazil’s monetary policy committee, voted unanimously to leave its Selic interest rate at 11.0% and released a replica of the prior May 28th meeting statement that also decided unanimously to keep the rate steady.  These terse, 92-word communications convey very scant information particularly with regard to any future decisions.  All […] More

Geopolitical Risk Weighs on Share Prices

July 17, 2014

The U.S. and Europe imposed further economic sanctions against Russia in protest of its meddling into Ukraine affairs.  Russia led European stocks and U.S. futures lower.  Fighting between Israel and Hamas and the ISIS insurgency in Iraq are causing additional geopolitical worry.  Investors remain confused about Fed forward guidance. Share prices are down 1.0% in […] More