MNI BRIEF: Brazil CenBank Cuts 50BPS And Changes Guidance
BCB sees another 50bp cut in the "next meeting", a shift from previously plural guidance that narrows its commitment to just one more reduction.
The Central Bank of Brazil (BCB) reduced its official Selic rate by 50bp to 10.75% Wednesday for the sixth consecutive time as expected, but changed its guidance to indicate a commitment to further cuts of the same size applies only to the "next meeting."
The board had previously signaled cuts of the same magnitude in the "next meetings," plural.
"The committee judges that the baseline scenario has not changed substantially. Due to heightened uncertainty and the need for more flexibility in the conduct of monetary policy, the committee members unanimously decided to communicate that, if the scenario evolves as expected, they anticipate a reduction of the same magnitude in the next meeting," said the statement.
Brazil's easing cycle started in August last year when the interest rate peaked at 13.75%. Since then, the BCB's board has been sticking to the 50bp pace per meeting.(See MNI POLICY: Inflation Data To Ease Brazil Cenbank Wage Nerves)