brazil expected inflation

July's reading marked the sharpest increase in prices since December 2019. Brazil’s central bank said it may consider another small cut to its key interest rate to boost an economy ravaged by the coronavirus, depending on prospects for public finances and inflation.The bank led by President Roberto Campos Neto on Wednesday lowered the benchmark Selic rate to an all-time low of 2% in an easing cycle that’s shaved 450 basis points off borrowing costs.

Updates with new unemployment data in penultimate paragraph Consumer prices increased a seasonally-adjusted 0.36% in July over the previous month, accelerating from the 0.26% rise logged in June. Instead, the government is ramping up emergency expenditures with proposals that may include an extension of popular, yet costly, monthly stipends for informal workers.Brazil posted its third straight record budget gap “The BCB slammed the door shut for interest rate hikes for the foreseeable future, and left it slightly ajar for a new rate cut. The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, jumped to 58.2 in July from 51.6 in June, marking the strongest reading since records began in February 2006, amid the continued lifting of coronavirus-induced restrictions. The central bank targets inflation at 3.75% next year and 3.5% in 2022 and economists surveyed by the bank currently don’t see the targets being reached before 2022.The bank is striking a cautious tone as it delivers a ninth straight rate cut to mitigate the economic collapse from the pandemic. Brazil’s inflation exceeded most economist expectations in February but remained comfortably below the official target just as a new central bank president takes the …

The National Monetary Council has set Brazil inflation target at 4.5% for the year 2007.

Brazil’s central bank said it may consider another small cut to its key interest rate to boost an economy ravaged by the coronavirus, depending on prospects for public finances and inflation. Brazil’s annual inflation rate tumbled more than expected in May to the lowest in 10 years, data showed, underscoring bets on new interest rate cuts and a lower inflation target. The value of the currency of Brazil is expected to close at BRLI0.78 against the dollar. Consumer prices increased a seasonally-adjusted 0.36% in July over the previous month, accelerating from the 0.26% rise logged in June. Yet policy makers are also monitoring the risk that the unprecedented level of public spending during the crisis could be extended into next year.“The central bank left the door open to more easing in language that points to a cut of a maximum of 25 basis points,” said Banco MUFG The coronavirus has forced President Jair Bolsonaro’s administration to postpone plans to cut debt and boost fiscal accounts. The acceleration was primarily driven by rising prices for transportation. We don’t expect the BCB to cut the rate again though: with all indications pointing to pressures for increased fiscal stimulus and stalled reforms, we don’t expect a comfortable scenario for a rate cut in September.

Brazil once was plagued by chronic inflation which turned into hyperinflation.

June's reading marked the sharpest increase in prices since December 2019. Brazil - Inflation Inflation rises in June. “Consequently, possible future adjustments to the current degree of monetary stimulus would occur with additional gradualism and would depend on the perception of the fiscal trajectory.”Board members also don’t foresee reductions in the monetary stimulus unless inflation expectations come close to the official target, according to the statement.