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Copom Increases Estimated Neutral Real Interest Rate To 4.5%

BRAZIL
  • Another note from the Copom minutes re raising the neutral real interest rate:
    • "Following the extensive debate and based on the accumulated evidence over recent meetings, the Committee opted to increase the estimated neutral real interest rate from 4.0% p.a. to 4.5%. Copom members evaluated the different factors that justify an increase and converged on the conclusion that there was a rise in the neutral rate."
  • One would assume that this suggests the committee view the current stance of policy as less restrictive than they had previously assumed.

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