Itaú BBA - Quarterly Inflation Report: forecasts consistent with a new rate cut and maintenance next year

Macro Brazil

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Quarterly Inflation Report: forecasts consistent with a new rate cut and maintenance next year

septiembre 26, 2019

The document indicates that the Selic rate may remain at a new low of 5.0% for a lengthy period, rising only from 2021 onward.


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

 

• The September 2019 inflation report shows forecasts consistent with a new interest rate cut at the next Copom meeting, on October 29 and 30. Additionally, the document indicates that the Selic rate may remain at a new low of 5.0% for a lengthy period, rising only from 2021 onward. According to scenarios in which the interest rate is at 5.0% by the end of 2020 and 7.0% in the following years, inflation would remain well behaved in the coming years, but would exceed the 3.5% target in 2022. Thus, the report seems to suggest that, according to the BCB’s view, there is room for the Selic to remain at 5.0% next year, even if the level of interest rate equilibrium in Brazil may be slightly higher than 7.0%.


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



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