The rise in Brazilian inflation, to 4.5% y/y in September, has already exceeded the BCB’s newly-published forecasts. And, taken together with comments from policymakers that hint at the start of a tightening cycle, it’s looking most likely that the first rate hike will come at the Copom meeting later this month. We’ve pencilled in a 25bp rise in the Selic rate to 6.75%.
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