巴西央行降息至13.75%，11月再降仍留窗口，在巴中资融资成本有望续降

Brazil’s Central Bank kept its guidance on interest rates virtually unchanged, meaning another Selic base rate cut remains possible at the November meeting, depending on how the data evolve. But not everything is the same as at the previous meeting. One difference is that the latest inflation projection of the Monetary Policy Committee (Copom) no longer incorporates an additional interest-rate cut this year. In August, Copom projected inflation at 3.2% in the 12 months through March 2028. At the time, the interest-rate path embedded in the exercise included two Selic cuts in 2026: the reduction delivered in August and another initially expected for November, which ultimately came at yesterday’s meeting. Central Bank leaves next rate move open after 25-bp cut Brazilian retail volume falls more than expected in July, reinforcing slowdown Supply shocks gain weight in Brazil inflation The Central Bank has now rerun its models and once again arrived at a 3.2% inflation projection for the first quarter of 2028. The difference is that the new calculation assumes only one rate cut: the one delivered on Wednesday (Sept. 16). That should not be read too literally as a signal that there is no room for further easing. Inflation projections should not be given excessive weight as an indication of how much scope Copom sees for additional cuts. In other words, the fact that no further Selic reduction is embedded in the latest inflation projection does not amount to forward guidance that rates cannot fall again. November decision What matters is the set of conditions Copom will face at its November meeting. By leaving its next move open, the committee is probably signaling that another cut remains a possibility. Recent experience suggests that this strategy of avoiding firm guidance on the next step has worked well. Three months ago, some market participants argued that the Central Bank should halt the Selic easing cycle, while a smaller group said Copom should raise the rate to as high as 18% a year. Since then, a series of economic indicators has strengthened confidence that tight monetary policy is having an effect. Inflation has eased, although much of the improvement reflects seasonal factors and favorable shocks. Cooling activity Economic activity is also showing signs of losing momentum, particularly in more cyclical sectors. The most pessimistic forecasts that fiscal expansion and government-backed credit would give the economy a major boost have not materialized, at least not to the extent feared. In Wednesday’s statement, which accompanied the reduction in the Selic rate to 13.75% from 14%, Copom acknowledged that the slowdown is underway. It also offered an important caveat: activity remains “at resilient levels,” while the labor market is still tight. Positive surprises Still, the fact that the inflation projection does not point explicitly toward another cut does not mean it provides no useful information. It does — although it needs to be interpreted cautiously given the high degree of uncertainty. The message from the forecast is that room for further interest-rate cuts will have to be created by favorable economic developments.