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MNI BCB Review – July 2024: Unanimous Hold, More Vigilance Required

MNI BCB Review - July 2024

MNI BCB Review - July 2024

Executive Summary

  • The Copom kept the Selic rate unchanged at 10.50% for a second successive meeting, in line with expectations.
  • Once again, the decision was unanimous, but the committee has become more cautious about the risks to inflation and is particularly vigilant about the impact of BRL weakness and rising inflation expectations.
  • Most analysts expect the Copom to stay on hold for the rest of this year, before rate cuts resume in 2025, but risks of a near-term hike remain if further FX weakness amidst ongoing fiscal pressures prompt a persistent increase in inflation expectations.

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