Citibank: The Central Bank of Brazil is expected to strengthen its hawkish rhetoric

Golden Finance reported that on June 17, Citibank analysts wrote that the Brazilian central bank may cut interest rates today while strengthening its guidance toward a tighter policy. It is expected that the Brazilian central bank will lower the Selic rate from 14.5% to 14.25%, but sticky inflation may become a stumbling block. Citibank expects the bank to stop cutting rates in September, at which point the Selic rate will reach 13.75%. Against the backdrop of inflation above the 3% target, Citibank said: “We expect the monetary authorities to upgrade the tone toward tightening in their communication.” Citibank analysts expect the Brazilian central bank to adopt more strategies based on economic data. The Brazilian real appreciated 0.5% against the US dollar.
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