Brazil in Little Rush to Cut Rates Amid Stubborn Inflation
- Communique highlighted need to hit inflation target in 2017
- Economists expect next move to be a decrease by year-end
Daly: Markets Believe in New Brazilian Administration
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Brazil’s central bank signaled it’s in no hurry to cut the benchmark rate, as policy makers grapple with high inflation and the fallout from a presidential impeachment trial.
The central bank’s board, led by its president Ilan Goldfajn, unanimously voted on Wednesday to maintain benchmark borrowing costs at a 10-year high of 14.25 percent. All 45 analysts surveyed by Bloomberg correctly forecast the so-called Selic rate. The board, known as Copom, indicated in a statement that it can’t loosen monetary conditions until it has greater confidence it will reach its inflation target, which is almost half the current rate of 8.7 percent.