Brazil’s central bank cuts its rate by 25bp

Banco Central do Brasil Monetary Policy Committee (Copom) decision:

  • 5 Copom members voted in favour of a 25 bp cut, 4 members voted for a
    50 bp reduction
  • Committee
    unanimously judges that the uncertain global scenario and the
    domestic scenario, marked by resilient economic activity and
    deanchored expectations, require greater caution
  • Monetary policy
    should continue being contractionary until the consolidation of both
    the disinflation process and the anchoring of expectations around the
  • Reinforces, with
    special emphasis, that the extension and adequacy of future changes
    in the interest rate will be determined by the firm commitment of
    reaching the inflation target in the relevant horizon
  • Current context
    requires serenity and moderation in the conduct of monetary policy
  • Global environment
    has become more adverse because of the heightened and persistent
    uncertainty about the beginning of the easing cycle in the US
  • The environment
    continues to require caution from emerging market economies

This article was written by Eamonn Sheridan at Source