HALISTER1: Brazil CPI Data Reinforces Lower End-of-Cycle Selic Est.: Icatu

Brazil CPI Data Reinforces Lower End-of-Cycle Selic Est.: Icatu

(Bloomberg) -- Inflation scenario is developing better than expected, which may lead to a lower Selic rate at the end of the year, but with probable maintenance of 1ppt cut at Brazil Central Bank next meeting in Sept., says Icatu chief economist Rodrigo Melo in an interview.
  • End of cycle likely to be between 7% and 7.5%, depending on reforms
  • Approval of the new BNDES long-term rate, known as TLP, would leave CPI scenario even more benign to a 7% Selic rate
    • IPCA-15 below expectations indicates Aug. IPCA between 0.30% and 0.35%
    • IPCA-15 was qualitatively positive
  • NOTE: Brazil CPI +0.35% M/m Through Mid-August; Est. +0.40%
Original Story: Icatu: IPCA-15 reforça projeção menor p/ Selic no final do ciclo To contact the translator on this story: Ana Carolina Siedschlag in São Paulo at asiedschlag@bloomberg.net To contact the translation editor responsible for this story: Danielle Chaves at djelmayer@bloomberg.net Reporter on the original story: Ana Carolina Siedschlag in São Paulo at asiedschlag@bloomberg.net Editors responsible for the original story: Daniela Milanese at dmilanese@bloomberg.net Leonardo Lara

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Rodrigo Melo (Icatu Vanguarda Administracao de Recursos Ltda)

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