Expect More Rate Hikes

May 2008 | Economic Analysis

Consumer price inflation continues to present a key concern for monetary policymakers, and we now believe that the central bank will compliment its 50bps interest rate hike in April with an additional hike of a similar magnitude in the monetary policy council's upcoming rate meeting in early June. We have revised up our end-2008 Selic rate forecast to 13.25% this year and expect inflation to remain above the bank's 4.5% year-end target.

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