Brazil Central Bank unexpectedly holds rates – TDS

By FXStreet FXStreet (Bali) – Sacha Tihanyi, Senior EM Strategists at TDS, notes that Brazil Central Bank sent the worst possible signal to markets by surprisingly holding rates unchanged, risking loss of credibility.

Key Quotes

“The BCB decided to hold rates, against our call for a 50bp hike, and against the bias of consensus; 3/4ths of Bloomberg’s surveyed analysts saw at least a 25bp hike.”

“The vote was once again split 6-2 in favour of no change, with the two dissenters calling for a 50bp rate increase.”

“We feel that this move exposes BRL to some degree, and will raise questions as to the credibility of the central bank in achieving its inflation goals considering the development in inflation momentum, and the underlying inflation trend.”
For more information, read our latest forex news. …read more

Source:: FX Street