LatinNews Daily - 17 September 2020

In brief: Brazil’s central bank interrupts cycle of rate cuts

* The monetary policy committee (Copom) in Brazil’s central bank (BCB) has maintained the benchmark interest rate, the Selic, at a historically low 2%, interrupting a sequence of nine consecutive cuts. This was in line with expectations, amid concerns that further easing would have threatened financial market stability, but local analysts have noted that this is likely a pause in the cycle of cuts, rather than the end of it. Noting that despite a more favourable outlook for emerging economies, uncertainties remain with the likely end of fiscal stimuli and the persistence of the coronavirus (Covid-19) pandemic, the Copom said that the likelihood of future (gradual) rate cuts would depend on its perception of the fiscal trajectory and of prospective inflation.

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