Brazil Central Bank Says Bigger Interest Rate Cuts Are Unlikely

09/26/2023 19:21
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Brazil Central Bank Says Bigger Interest Rate Cuts Are Unlikely

Brazil’s central bank poured cold water over bets on a faster pace of interest rate cuts and cited a number of factors that could determine the length of the monetary easing cycle, including long-term inflation expectations which remain above target.

  • Central bank cut key rate by 50bps to 12.75% on Sept. 20
  • Services inflation is easing, though activity proves resilient

The central bank headquarters in Brasilia, Brazil.

Photographer: Arthur Menescal/Bloomberg

Updated on

Brazil’s central bank poured cold water over bets on a faster pace of interest rate cuts and cited a number of factors that could determine the length of the monetary easing cycle, including long-term inflation expectations which remain above target.

“The Committee judges that there is low probability of an additional intensification in the pace of adjustment, since this would require substantial positive surprises that would raise even further the confidence in the prospective disinflationary dynamics,” central bankers wrote in the minutes of their Sept. 19-20 policy meeting published on Tuesday.

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