Brazil's central bank cuts its rate by 25bp

Decision of the Monetary Policy Committee of the Central Bank of Brazil (Copom):

  • 5 COBOOM members voted in favor of a 25 basis point reduction, and 4 members voted in favor of a 50 basis point reduction.

  • The Committee unanimously considers that the uncertain global scenario and the domestic scenario, characterized by resilient economic activity and volatile expectations, require increased caution.
  • Monetary policy should continue contraction until disinflation is consolidated and expectations around targets are stabilized
  • Emphasizes, with particular emphasis, that the extension and adequacy of future interest rate changes will be determined by a firm commitment to reaching the inflation target over the appropriate horizon.
  • The current context requires calm and moderation in the management of monetary policy
  • The global environment has become more negative due to the increasing and continuing uncertainty regarding the beginning of the monetary easing cycle in the United States
  • The environment continues to require caution from emerging market economies

This article was written by Eamonn Sheridan at www.forexlive.com.

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