Market news
03.08.2023, 13:52

USD/BRL: Monetary policy will be less supportive of the Real – Commerzbank

The Brazilian central bank (Banco Central do Brasil, BCB) decided to cut 50 bps off its benchmark rate to 13.25%. Economists at Commerzbank analyze Real (BRL) outlook after the Interest Rate Decision.

BCB cuts key interest rate by 50 bps

The BCB kicked off its rate-cutting cycle on Wednesday with a larger-than-expected 50 bps cut in its benchmark rate to 13.25. The larger move increases our fears that the BCB may now be acting more dovishly, especially with further 50 bps cuts on the horizon. However, these concerns will be more relevant in the future.

Currently, the inflation trajectory is in line with reaching the target on a sustainable basis in 2025, which could justify these faster rate cuts, given the still restrictive (real) interest rate level, which therefore should not weigh excessively on the BRL. However, it will be crucial to see how the BCB's central bankers react to a change in the inflationary environment. We suspect that monetary policy will be less supportive of the Real in the future than it has been in recent times.

 

© 2000-2024. All rights reserved.

This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).

The information on this website is for informational purposes only and does not constitute any investment advice.

The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.

AML Website Summary

Risk Disclosure

Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.

Privacy Policy

Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.

Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.

Bank
transfers
Feedback
Live Chat E-mail
Up
Choose your language / location