Kenneth Rapoza – Forbes, 06/09/2016
Brazil’s Central Bank kept interest rates at 14.25% on Wednesday after market hours as expected, citing inflation concerns. No one expected a surprise cut anyway, as the Bank is now undergoing a leadership shift. Alexandre Tombini is out. Itau economist Ilan Goldfajn is now in. Wednesday marked the last time Tombini will take part in a monetary policy committee meeting as Bank governor.
For now, investors shouldn’t expect a rate decline until October at the earliest, says Nomura Securites analyst Joao Ribeiro. The iShares MSCI MSCI +% Brazil (EWZ) sold off by 1.4% after market on the news.
A copy and paste statement from the Bank reads: “The committee recognizes the advances in the policy to combat inflation, especially the containment of the second order effects of the adjustments in relative prices. However, the committee considers that the high level of 12-month inflation and inflation expectations that are distant from the objectives of the target regime, do not offer space for easing of monetary policy.”