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Brazil: Rates to remain on hold - Rabobank

FXStreet (Córdoba) - Rabobank analysts joined the consensus that expect no change from the Brazil Central Bank (BCB) on Wednesday.

Key Quotes:

“In line with the unanimous analyst consensus on Bloomberg, expect no change at 14.25%. This is
where the SELIC has stood since the last 50bp hike back in July that ended the 300bp tightening
cycle that began in October of last year.”

“On Wednesday 21st October the BCB will announce its latest rate decision. Here, the Bank finds itself stuck between a rock and a hard place with inflation in the high single digits while GDP growth is set to contract by more than 2.5% y.y.

“Although inflation stands well-above target and expectations have edged up again recently, the central bank’s hands are somewhat tied. The economy is set to contract by more than 2.5% this year and the market and ratings agencies are closely focused on the country’s fiscal footing.”

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