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MNI BCB Review - June 2022: Further Tightening Signalled

MNI BCB Review - June 2022

MNI BCB Review - June 2022

Executive Summary

  • At the June 15 meeting, the Copom unanimously decided to increase the Selic rate by 50BPs from 12.75% to 13.25%. This decision was in line with the majority of surveyed analysts, with just two predictions for a bolder 75bp move.
  • Significantly, there were no explicit signals as to when the hiking cycle will end.
  • The Copom stated that given the risk of a deanchoring of longer-term inflation expectations, it remains appropriate to continue with the process of monetary tightening “significantly into even more restrictive territory”.
  • In terms of forward guidance, the Copom projects another Selic rate adjustment, “of the same or lower magnitude”.
  • Worth noting, today is a local holiday in Brazil for Corpus Christi Day and so markets will reopen Friday.

Click to view full review: MNI BCB Review - June 2022.pdf

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