LatinNews Daily - 18 December 2024

*The monetary policy committee (Copom) of Brazil’s central bank (BCB) has released the minutes from its 10-11 December meeting in which it raised the benchmark interest rate (Selic) by 100 basis points. The minutes suggest the Copom decision to increase the Selic rate to 12.25% was influenced by a range of external and domestic factors, including uncertainty over the US economy, volatility in the value of the Brazilian real, scepticism over the federal government’s commitment to fiscal discipline, and rising inflation in Brazil. The Copom’s latest projections show that annual inflation in 2024 is expected close the year at 4.9%, while the forecast for 2025 is 4.5%. In its latest meeting, the Copom stated that it anticipates 100-basis-point increases in its next two meetings, which would bring the Selic up to 14.25% in March. According to the forecasts of private sector economists and analysts, whose projections are published in the BCB’s weekly Focus bulletin, the Selic is expected to stand at 14.0% by the end of 2025.