Brasília – Financial institutions polled by the Brazilian Central Bank expect that the benchmark interest rate will be slashed by 0.25 percentage point this week. The next two days will see the Central Bank’s Monetary Policy Committee (Copom) convene to set the benchmark rate, which is now 14.25% per annum.
On this year’s final meeting, slated for November 29 and 30, the poll’s respondents expect yet another rate cut. At the end of 2016, the Selic is expected to be 13.5%, as per the Focus Bulletin, issued weekly by the Central Bank. Last week’s estimate had been 13.75%. Copom is expected to reduce the rate further in 2017, eventually reaching 11% at the end of the year.
The forecast for the inflation rate, measured in the National Extended Consumer Price Index (IPCA), changed down from 7.04% to 7.01% – the fifth straight downward revision. The estimate for 2017 moved down for the second time, from 5.06% to 5.04%.
The shrinkage expected in the Gross Domestic Product (GDP) was revised from 3.15% to 3.19% for this year, with 1.3% growth seen happening in 2017.
*Translated by Gabriel Pomerancblum
