Benito Berber, Research Analyst at Nomura, points out that the central bank of Brazil is scheduled to meet today and they expect a 25bp cut, to 6.25%.
“This would be, once again, a historical low and the last cut in a cycle that began at 14.25%. Central bank communication and inflation/activity data have been very supportive of this final lowering of the Selic rate. However, the recent sell-off in the BRL has raised risks to stability, and we believe this could be a reason for caution going into the meeting.”
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