The Central Bank of Brazil could resume a cycle of rise from interest rates although the level is already at the highest in two decades.
He Central Bank of Brazil said Tuesday that I would not hesitate to resume a cycle of rising interest rates If he considered it appropriate, but added that the economic scenario is developing as planned and remains consistent with its current monetary policy.
In the minute of your last meeting, in which the reference rate in 15%, the highest level in almost two decades, maintained for the second timethe bank said that those responsible for monetary policy would remain attentive and especially monitor the inflation of the services.
A rate of rates in Brazil could collaborate to strengthen the Real, which attracts capitals and changes regional balance. This generates greater financial pressure over Argentina, especially if it has no margin of monetary maneuver.
In what context the rise could happen in interest rates
On Monday, the Brazilian bag took off from the global increases and fell, again, again, tax concerns. The income and expenses evaluation report was disclosed, in which the Government increased by 1.4 billion reais the blockade of expenses, up to 12 billion, to comply with the expense limit that the budget allows.
Despite this, The expected primary deficit was increased, which is already located at the limit allowed by the goal (-0.25%) of GDP. “No contingencies were made since it is still within what is allowed, but from now on any worsening will require contingency. The market is likely that this occurs,” they explained from Delphos.
In this context, it was disseminated in the Brazilian medium that Lula would ask for a budget for an increase in “family bag” a program of transfers to people.
In parallel, The US Treasury Secretary, Scott Besent, announced new measures against Alexandre de MoraesJudge of the Supreme Federal Court (STF) of Brazil who is directly faced with Jair Bolsonaro and his surroundings for several years.
“This was well received by the market. The decision dissipated part of the pressure that fell on the banks, until now indicated as possible targets of an eventual reprisal under the framework of the Magnitsky Law,” Delphos added.
Source: Ambito
