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MNI BCB Review – Dec 2023: Dovish Statement Tweaks, Guidance Unchanged

MNI BCB Review - December 2023

MNI BCB Review - December 2023

Executive Summary

  • At the December 13 meeting, the Copom decided to cut the Selic rate by 50bps to 11.75%. The decision was adopted by all members of the committee.
  • Furthermore, the central bank maintained the guidance of anticipating “further reductions of the same magnitude in the next meetings”.
  • While the maintenance of such guidance may disappoint market participants that are forecasting an acceleration of the easing pace ahead, there were enough dovish tweaks in the statement, which accompanied with a dovish Fed, could further stoke speculation of quicker or extended monetary easing in 2024.

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