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When will the BCB shift to tightening?

The timing of the Brazilian central bank’s first interest rate hike is likely to be determined by politics as much as economics. There’s a lot of uncertainty related to the outcome of the Presidential election. But, as things stand, it seems most likely to us that the tightening cycle will begin at Copom’s next meeting on 31st October, probably with a 25bp rise in the Selic rate.

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