HALISTER1: BCB May Maintain On-Hold Signals For Prolonged Period: Icatu

BCB May Maintain On-Hold Signals For Prolonged Period: Icatu

(Bloomberg) -- Despite preliminary signs 2016 inflation expectations have stopped worsening, the BCB may keep signaling that rates will be left unchanged for a prolonged period to assure prices will slow further, Rodrigo Melo, Chief Economist at Icatu Vanguarda Administracao de Recursos, an investment firm in Rio, says in a phone interview.
  • BCB today starts its March 2-day meeting, may keep Selic steady at 14.25% and also maintain its on-hold stance
  • While Brazil real and swap rates have showed some stabilization in recent weeks, risks remain
  • Mkt monitors political crisis, U.S. and China economies
  • In case U.S. economy resumes faster growth, renewed bets on rate hikes could lead to a selloff, harming BRL and other assets that have benefited from Fed’s recent dovish signals
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Rodrigo Melo (Icatu Vanguarda Administracao de Recursos Ltda)

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