By Arthur Carvalho of Morgan Stanley (via Investment Postcards)(Guest Post)
Brazil’s central bank’s 25bp rate hike last week brought the Selic rate to 12.5%. But in contrast with most Brazil watchers, we believe that move could be the central bank’s last move for the year. We interpret recent comments by the central bank as suggesting that it will end the rate-hiking cycle by August and possibly as early as this week. And given the growing uncertainty in the global environment, it would be easy to imagine a decision at the end of August indicating that it is time to hold off on additional…
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