MNI BRIEF: BCB Holds Guidance In "Uncertain" Climate-Minutes
Last week, the BCB reduced its official rate by 50bp for a fifth consecutive time and indicated more cuts in the "next meetings."
Brazil's Central Bank decided to keep unchanged forward guidance because it “already includes the appropriate conditionality in an uncertain environment," minutes of the BCB board's meeting showed on Tuesday.
Last week the BCB reduced its official rate by 50bp to 11.25% for a fifth consecutive time and indicated more cuts of the same magnitude would come in the "next meetings," effectively committing policymakers to the current pace of easing until at least the May decision. (See MNI INTERVIEW: No Acceleration Of Brazil Rate Cuts - Le Grazie)
The BCB considers that it needs to keep monetary policy at restrictive levels "to consolidate the inflation convergence to the target and the anchoring of expectations,” the minutes showed, adding that members considered several scenarios.