Brazil: No hikes in near-term sight for the BCB - TDS

Analysts at TD Securities note that the BCB sounded marginally more dovish thanks to a view for a more gradual (post-strike) growth recovery, and re-emphasized the high level of economic slack in the economy.

Key Quotes

“The BCB kept rates on hold at 6.50%, as we and nearly all of the market had expected. There was not a lot of substantial change to the statement, however what changes there were suggest that the BCB is not looking at the possibility for rate hikes any point in the near future.”

“We see the market moving further towards our view of no hikes until the start of 2019, though also note that the BCB is making its accommodative monetary stance contingent on the perception of a continued commitment to fiscal reforms (through and beyond the election period).”