Ultima Markets[Market Hotspot] Brazil's interest rate cut suggests there is room for easing

stay3At the monthly meeting, the Brazilian central bank willSelicInterest rate (benchmark interest rate) reduction0.50Percentage points, to10.75%, in line with market expectations. Central bank officials pointed out that the international situation is still unpredictable, and it is not yet clear when major economies in the world will start loose monetary policy and global inflation issues.  

On the domestic front, the economy has shown signs of slowing growth, in line with the Monetary Policy Committee of the Brazilian Central Bank（Copom）The predictions are consistent. Although overall consumer prices have fallen, the core inflation index has recently exceeded the established target. Copomestimate2024The annual inflation rate is3.5%，2025Year can be reduced to3.2%。

The decision to cut interest rates is to guide inflation to the target level and provide stable forces for the economy. The committee reiterated the importance of combating inflation and mentioned that if the preset situation is established, there may be further interest rate cuts. This approach aims to integrate prudence and moderation in the implementation of monetary policy in the context of global uncertainty.

stay3In the month of the month, as investors digested the interest rate decisions of the central banks of Brazil and the United States, the exchange rate stabilized1USD exchange rate4.97Brazilian Rio. Monday, Brazilstock market index Ibovespa Closing slightly lower, to126,848Points. Investors lead expectations for the Central Bank's Monetary Policy Committee（Copom）The release of the latest meeting minutes, and3Latest monthly inflation and employment data.

(Half year chart of USD to Brazilian Real)

（IbovespaIndex monthly chart)

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