Brasília – Brazilian financial institutions polled by the Central Bank believe the benchmark interest rate, known as Selic, to be kept at 14.25% per annum at the Monetary Policy Committee (Copom) meeting this week. The poll’s respondents nonetheless believe the rate will be slashed at subsequent meetings, to eventually end the year at 13.75% per annum. The forecasts are from the weekly Focus Bulletin issued this Monday (29) by the Central Bank.
In 2017, Brazilian financial institutions are expecting the Selic to drop further, until it reaches 11.25% per annum at year-end. Last week’s Selic forecast for the end of 2017 had been 11%.
Respondents believe the Extended National Consumer Price Index (IPCA), the official measure of inflation in Brazil, will be 7.34% at the end of the year – thereby exceeding the target range’s upper threshold. The last forecast had been 7.31%. The forecast for 2017 climbed from 5.12% to 5.14%.
Whereas inflation estimates have gone up, the forecasts for the economy improved marginally. The expected Gross Domestic Product (GDP) shrinkage moved from 3.2% to 3.16% for this year, and from 1.25 to 1.23% for the next.
*Translated by Gabriel Pomerancblum
