The increase in Brazilian inflation to 10.1% y/y in the middle of September means that another large hike in the Selic rate at the Copom meeting next month is nailed on (we expect a 100bp hike to 7.25%). And while inflation should start to ease back from October, we think that the tightening cycle will continue with the Selic rate is likely to hit 9.00% by early next year.
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