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Itaú on COPOM - See 5.5% Selic By Year-End

BRAZIL

Tone Of Statement Suggests Authorities Have Sharp-But-Short Adjustment In Mind

  • Despite the intention to keep policy with an expansionary bias, authorities opted to start faster out of the gate.
  • Whether they will succeed with sharp-but-short strategy will depend on the data.
  • They had a 75-bp rate move pencilled for May Copom meeting, so will keep said forecast.
  • Still envisage a full cycle taking the base rate to 5.5% pa by year-end.
  • May revisit the call in light of the minutes, that will be released next Tuesday, March 23.

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