In its last meeting before the October presidential elections, the Monetary Policy Committee (Copom) kept base rate Selic stable at 6.5% for the fourth consecutive time.
But monetary officials also issued the first hints they could start raising rates if inflation picks up or risks increase: “This stimulus will begin to be phased out if the prospective scenario for inflation in the relevant horizon to monetary policy and/or its balance of risks deteriorates."
The tougher tone of monetary officials led economists to start believing Selic could rise as soon as the next election, depending on the electoral outcome and inflation expectations, as the stronger dollar against the real is already pushing the market to raise forecasts this year.
Inflation is officially predicted to end at 4.1% this year and 4% in 2019, below the targets of 4.5% and 4.25%, respectively.
About Me
- Waldemar Jezler
- For over 30 years, Brazilian-American investment banker Waldemar Jezler has worked in the finance sector. Jezler earned his Bachelor's degree in Civil Engineering from the University of São Paulo in Brazil and then went on to attend Harvard Business School for his MBA. While at Harvard, Jezler was highly involved in extracurricular activities, including a term as President of the Ibero American Club.