Brazil Rates Stay Untouched

Brazil’s central bank says its board unanimously decided to keep the Selic rate at 8.75%, in line with market expectations. “We believe that this decision is consistent with our current call for Selic, which states that the easing cycle is over and most likely Copom will seek to maintain Selic unchanged for the next year or so,” says Goldman Sachs. It expects the rate to stay at this level until Q3 2010. RBC, whose forecast was in line with expectations, also expected the bank to signal a pause in cuts. Brazil’s central bank has reduced the Selic rate by 500bp so far this year.