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3 Mar 2015
Brazil might see another 50bps rate cut in March – Rabobank
FXStreet (Barcelona) - The Rabobank Team revises their inflation forecast for Brazil and expects the Brazilian central bank to cut rates by an additional 50bps in its March meeting.
Key Quotes
“Looking ahead, we do not expect to see an inflation print without a “7” handle at all this year and we forecast an average rate of 7.3% and an end of year reading of 7.1%.”
“Indeed, we see administered prices rising nearly 11% y/y and we expect a year-end USD/BRL exchange rate of just above 3.0 which will both feed through into higher prices.”
“In response to persistent price pressures, we expect the Bank to raise rates 50bp at the March 4th meeting before a final 25bp hike at the April 28th meeting which will push the SELIC up to our projected peak for the cycle of 13.00%.”
Key Quotes
“Looking ahead, we do not expect to see an inflation print without a “7” handle at all this year and we forecast an average rate of 7.3% and an end of year reading of 7.1%.”
“Indeed, we see administered prices rising nearly 11% y/y and we expect a year-end USD/BRL exchange rate of just above 3.0 which will both feed through into higher prices.”
“In response to persistent price pressures, we expect the Bank to raise rates 50bp at the March 4th meeting before a final 25bp hike at the April 28th meeting which will push the SELIC up to our projected peak for the cycle of 13.00%.”