Copom set to cut further, Chile’s CB stays the course

The Brazilian central bank’s 75bp cut in the Selic rate last night and the dovish tone of the accompanying statement has prompted us to pencil in a further 50bp of cuts (to 2.50%) in the coming months. Elsewhere, the Chilean central bank gave little away in the communications around last night’s decision, at which the policy rate was left unchanged. But we think further easing is probably on the cards – including the possibility of a formal QE programme to lower long-term interest rates.