Free Trial

BRAZIL: MNI BCB Review – Dec 2024: Hawkish Copom Signals Aggressive Hiking Cycle

BRAZIL
  • The Copom accelerated the tightening cycle again with a bold 100bp hike of the Selic rate to 12.25%.
  • A majority of analysts had expected a 75bp hike, although a significant minority were looking for a 100bp move, which was also consistent with market pricing.
  • In an explicitly hawkish statement, the Copom reintroduced forward guidance and indicated that additional hikes of 100bp would come in the next two meetings. Additionally, the BCB have also announced a $4bn FX auction today to provide liquidity to the spot market.
  • Analysts believe the front-loaded adjustment will help to contain pressure on local assets and inflation expectations, although some say that further fiscal measures are still needed to stabilise BRL.
    • Click here to view the full review.

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.