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(Marcelo Camargo / Agencia Brazil)
(Bloomberg) – The Copom conference minutes put a damper on chilled water: the Central Bank could even reduce the Selic in 2019. This possibility was mentioned by some economists after the statement quoting Inflation projections lower than the target and increase the risk of lower prices due to activity still declining.
It seems that administrators did not share this view of the market and took the opportunity to refine the speech.
"Prudence, serenity and perseverance in monetary policy decisions, including in the face of unstable scenarios, have been helpful" in the terms of paragraph 22 of the document.
And they add what seems to be an indication for the next jury, which will soon take over. "The Committee understands that decisions inspired by these principles are a good guide for monetary policy".
Paragraph 15 is another alert. After repeating two points in the communiqué, namely a high degree of invalidity and a lower risk of continuity of reforms, the BCB "stressed that the risks of inflation" continued to weigh more in its balance of risks.
In other words, "the asymmetry of the balance of risks for inflation persists, although it is less intense". This point was removed from last week's statement to keep the Selic rate at 6.5% and included in the minutes.
For Maurício Oreng, Rabobank's chief strategist for Brazil, the speech suggests that the committee does not appear. ready to "place bets". "This point is cooling the discussion of even lower interest rates and possible interest reductions," he said, noting that Copom still envisaged an expansionary monetary policy, that is to say – say a lower interest than the neutral position.
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