Brazil’s central bank (BCB) cut the Selic rate by 50bp, to 12.25%, at yesterday’s Copom meeting and signalled again that further similar reductions lie in store over the next few meetings. Even so, with strong wage growth set to keep inflation above target over the next 12-18 months and fiscal risks one again rearing their head, we think there is less scope for easing than most analysts currently anticipate.
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