Central Bank expected to raise interest by 75 bp

The Central Bank should act as expected and raise the benchmark interest rate Selic by 75 basis points in the Monetary Policy Committee (Copom) meeting next week, in line with the official communication after the March meeting. This is the opinion of almost all market economists, according to a survey conducted by Valor with 98 financial and consulting firms. Of this total, 96 project that the Selic will leave the current 2.75% and reach 3.50% next week, while only two firms estimate a higher increase in the basic interest rate, of 100 basis points, to 3.75%.

Source: Valor international

Market now expects further Selic hikes in 2021

After being surprised with a 75 basis points increase in the the Selic, Brazil’s benchmark interest rate, by the Monetary Policy Committee (Copom) of the Central Bank, the market is starting to calibrate expectations and is moving toward higher levels than previously estimated for the policy interest rate at the end of this year. In a survey conducted by Valor between Thursday and Friday with 72 lenders and consulting firms, the median of the projections collected pointed to the Selic rate at 5% at the end of this year. Before the Copom meeting, the average point of the estimates indicated the basic interest rate at 4.5%.

Source: Valor International

Analysts see Selic at 2% by end of 2020

Uncertainties over the future of the Brazilian economy will likely force the Central Bank’s Monetary Policy Committee (Copom) to keep Selic policy interest rate unchanged next week. This assessment is unanimous among the 76 financial firms heard by Valor, which also expect the Selic to be maintained at the December meeting, the last one in 2020. The projections for next year are dispersed, but there is a consensus, shared with the Central Bank itself, that the rates’ trajectory depends on the fiscal situation. For 2021, BTG Pactual foresees interest at 3%, Banco Inter at 3.5%, Credit Suisse at 4% and Pezco at 4.75%. Persevera bets on new cuts.

Source: Valor International