Itaú BBA - Inflation Report: close call

Macro Brazil

< Back

Inflation Report: close call

September 27, 2018

Copom´s inflation forecasts indicate that the Selic rate can be kept constant in the coming meetings.


For the version with all charts and tables, please open the attached pdf file 
 

The BCB´s inflation report shows, in the scenario with constant Selic rate and constant exchange rate, inflation forecasts at 4.4% in 2018, 4.5% in 2019, and 4.2% in 2020. The proximity of these forecasts to the respective inflation targets of each year (4.50% for 2018, 4.25% for 2019, 4.00% for 2020) indicates that, except for additional deterioration in the inflation outlook, stemming from either further exchange rate depreciations and/or a rise in inflation expectations, the Selic rate can be kept constant in the coming meetings. For now, we expect the Copom to leave the base rate unchanged at 6.50%pa in October, but will be closely monitoring exchange rate and inflation expectations developments.
 

For the version with all charts and tables, please open the attached pdf file 



< Back