The decision by the Banco Central do Brasil (BCB) to hike the benchmark Selic rate by 50 basis points (bps) to 11.25% at its January meeting alters my 2011 interest rate forecasts but does not shift my outlook for monetary policy, namely that Brazil’s monetary authorities will continue to view rate hikes as something of… [Read more]
President-elect Dilma Rousseff has kicked off her cabinet appointments by announcing key figures in the economic team, reinforcing my view that the new administration will focus on continuing the economic policy mix started by the outgoing Lula government. Finance Minister Guido Mantega will remain in his post, while hawkish central bank president Henrique Meirelles is… [Read more]
Brazil’s Q409 real GDP reading came in roughly in line with market expectations, posting a growth rate of 2.0% quarter-on-quarter (q-o-q) seasonally adjusted – its highest reading in two years. Expectations of a robust headline number for Q4 have previously sent the interbank deposit (DI) futures market higher, amid expectations that the Banco Central do… [Read more]