Compared with data before the monetary policy decision, the standard deviation about these expectations has slightly decreased, showing a lower variance in projections concerning this scenario. The central bank will release the minutes from its latest meeting on Tuesday. Members of President Luiz Inacio Lula da Silva's leftist government, which has criticized the central bank for potentially stalling the economy by keeping rates high, have said they want it to ease monetary policy in response to an economic slowdown, credit contraction and banking turmoil abroad. (Reporting by Marcela Ayres; Editing by Hugh Lawson)
BRASILIA, March 27 (Reuters) - Brazil's central bank is
still expected to cut interest rates in November despite its
hawkish policy statement indicating no room for monetary easing
amid rising inflation expectations, a bank survey showed on
Monday.
After holding its benchmark interest rate at a six-year-high
of 13.75% on Wednesday, the central bank emphasized increasing
inflation expectations as a cause for concern and reinforced
that it will not hesitate to resume rate hikes if disinflation
does not occur as expected.
Nonetheless, the weekly Focus survey of more than 100
private economists, published by the central bank, still shows a
median forecast for a 50-basis point cut in November followed by
another 50-basis point cut in December.
This scenario, unchanged since the beginning of this month,
would bring the benchmark interest rate to 12.75% by the end of
this year.
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