The statement to yesterday’s Brazilian central bank meeting, at which the Selic rate was hiked by 50bp to 13.75%, made clear that Copom is more confident that inflation will fall back and also more concerned about the slowing economy. We remain of the view that there will be one more 25bp hike (to 14.00%) in September, but it’s clear that Brazil will be one of the first EMs to end its tightening cycle.
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