The Monetary Policy Committee (Copom) of the Central Bank reinforced this Tuesday (22) that it considers it appropriate to make a new adjustment of 1 percentage point in the Selic, the basic interest rate of the economy, despite the uncertainties generated by the war in Ukraine. However, it leaves the door open to be more aggressive.
“A further adjustment of 1 percentage point, followed by an additional adjustment of the same magnitude, is the most appropriate strategy to achieve sufficient monetary tightening and ensure the convergence of inflation over the relevant horizon, as well as the anchoring of longer-term expectations” , said in minutes referring to last week’s meeting, when it decided to increase the Selic by 1 point, to 11.75% per year.
“However, the Committee recognizes the challenging scenario for the convergence of inflation to its targets and reinforces that it will be ready to adjust the size of the monetary tightening cycle, if the scenario evolves unfavorably”, he added.
The minutes released this morning show a more dovish, in market jargon to refer to a more lenient stance, in the opinion of RB Investimentos strategist Gustavo Cruz. “I understand that the Copom minutes were more dovish than the communiqué, it gives more signs that they intend to end (the cycle of high with the rate) at 12.75% per year, although it leaves the door open to go further”, he says.
*In update
Source: CNN Brasil
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