Itaú BBA - Copom: Steady at the helm

Macro Brazil

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Copom: Steady at the helm

octubre 30, 2019

The Copom delivered the widely expected decision, cutting the Selic rate by 50 bps, and mentioned another 50-bp rate cut ahead, in December.


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

 

• The Copom delivered the widely expected decision, cutting the Selic rate by 50 bps, to an all-time low of 5% p.a., in a unanimous decision. Its statement indicated that the next policy move will probably be another 50 bps cut, taking the Selic to 4.5% p.a. by year-end. The authorities calibrated their communication to curtail market expectations about additional monetary easing, although the forecasts presented, especially that for 2021 inflation in the market scenario (3.5%), suggest they should be comfortable about taking the policy rate to 4% p.a. We expect the Copom to cut the policy rate to 4.5% in its final meeting of the year, and to 4% pa by March 2020. We will learn more about the rationale for this decision with the release of the meeting minutes on Tuesday, November 5, at 08:00 Brasília time.


 

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



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