Central Banks
Brazil’s Central Bank Sees Chance of Rate Cut in August
- Policymakers held key rate steady for seventh time at 13.75%
- Outlook improves as annual inflation eases closer to target
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Brazil’s central bank said it may be able to start cutting interest rates in August after President Luiz Inacio Lula da Silva and top members of his economic team demanded clarity about the timing of an expected monetary easing cycle.
While policymakers hadn’t ruled out an August rate cut in a short statement issued together with their June 21 decision, the minutes of that meeting published on Tuesday were much more explicit about that possibility. The change in tone followed growing outrage in the administration about the board’s decision to hold borrowing costs at 13.75% last week, without clearly saying when cuts could start.