MNI BRIEF: Brazil's Copom Hikes Selic By 100BP As Expected
MNI (BRASILIA) - The Central Bank of Brazil (BCB) unanimously decided to hike its official Selic rate by 100 basis points again to 13.25% Wednesday, while signaling one more cut of the same size at the the next meeting. The move was in line with market expectations.
"In light of the continuation of the adverse scenario for inflation convergence, the Committee anticipates another adjustment of the same magnitude in the next meeting, if the scenario evolves as expected," the statement said. The board's December decision had pointed to increases of the same size at the next "two meetings."
"Beyond the next meeting, the Committee reinforces that the total magnitude of the tightening cycle will be determined by the firm commitment of reaching the inflation target and will depend on the inflation dynamics," added.
This marks the fourth consecutive rate hike amid a worsening inflation outlook driven by fiscal risks and external uncertainty. (See MNI INTERVIEW: BCB Likely To Stick To 100BP Guidance-Le Grazie)