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MNI BCB Review – Nov 2023: Another 50BP Cut, Statement Conveys Ongoing Caution

MNI BCB Review - Nov 2023

MNI BCB Review - Nov 2023

Executive Summary

  • At the November 01 meeting, the Copom decided to cut the Selic rate by 50bps to 12.25%. 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”.
  • The statement highlighted an adverse global environment due to a tightening in financial conditions, elevated levels of core inflation across many countries and heightened geopolitical uncertainty. Domestically, the Copom see economic activity evolving in line with the forecasted scenario.
  • Interestingly, despite the 2023 year-end inflation forecast being revised down to 4.7% in the reference scenario (from 5.0%), projections for longer-term expectations were revised a tenth higher to 3.6% at end-2024 and 3.2% at end-2025. In a marginally hawkish tweak, this highlights that expectations continue to remain unanchored.

Click to view the full review:

MNI BCB Review - November 2023.pdf

HomepageLatAm Bank - ReviewEM Central Bank ReportsEM Central Bank ReviewEmerging Market NewsCentral Bank of Brazil - Review
HomepageLatAm Bank - ReviewEM Central Bank ReportsEM Central Bank ReviewEmerging Market NewsCentral Bank of Brazil - Review

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