The Banco Central do Brasil’s (BCB’s) monetary policy committee (COPOM) is scheduled to decide rates on 3 June. The COPOM has been expressing a more hawkish tone than anticipated given the advanced stage of the hiking cycle (200bps of hikes since October) and given how weak the economy has been. Members of the committee, including BCB president Tombini most recently, have said little to signal a moderation in the pace of current policy tightening, underlining the intent to remain vigilant on inflation. “We therefore expect the 3 June COPOM meeting to bring another 50bps hike (from our previous call of a 25bps increase) and expect the hiking cycle to end in the 29 July COPOM meeting with a final 25bps hike, bringing the SELIC rate peak at 14.0% (from 13.75% prior)”, says Standard Chartered.
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