Central Banks
Brazil Central Bank in No Rush to Cut Again Amid Fiscal Woes
- Minutes dispell concern on rate cuts, avoid debate on hikes
- Bank now sees neutral interest rate at 4.75%, from 4.5%
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Brazil central bank signaled it’s not considering resuming its monetary easing cycle any time soon as the economy grows faster than it anticipated and inflation expectations rise amid persistent fiscal concerns.
In minutes to their June 18-19 meeting, central bankers also said the economy now requires higher real interest rates to keep growing without inflationary pressures. They increased the so-called neutral interest rate to 4.75% from 4.5 previously, also considering scenarios with a neutral rate of as much as 5% — closer to levels seen by most economists.