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MNI INTERVIEW: Mesquita Sees 25BP BCB Hike, 50 Not Ruled Out

Former BCB deputy governor for economic policy Mario Mesquita speaks with MNI in an interview.

MNI (BRASILIA) - The Central Bank of Brazil is likely to initiate a gradual tightening cycle with a 25-basis-point hike to 10.75% this week, although a 50bp increase cannot be entirely ruled out, former BCB deputy governor for economic policy Mario Mesquita told MNI.

"Since the total rate hike cycle they likely have in mind is not overly aggressive, at least for now, and given the communication from the members, it seems that a 25bp hike is more likely. However, a more aggressive move can't be completely ruled out, although reaching consensus on a 50bp hike would be more difficult," Mesquita, now chief economist at Itau Unibanco, said in an interview.

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MNI (BRASILIA) - The Central Bank of Brazil is likely to initiate a gradual tightening cycle with a 25-basis-point hike to 10.75% this week, although a 50bp increase cannot be entirely ruled out, former BCB deputy governor for economic policy Mario Mesquita told MNI.

"Since the total rate hike cycle they likely have in mind is not overly aggressive, at least for now, and given the communication from the members, it seems that a 25bp hike is more likely. However, a more aggressive move can't be completely ruled out, although reaching consensus on a 50bp hike would be more difficult," Mesquita, now chief economist at Itau Unibanco, said in an interview.

Keep reading...Show less