We expect the Brazilian Central Bank (BCB) will lift the Selic Rate 100 bps today; however, the accompanying statement could lean more hawkish given the potential inflationary effects from Russia-Ukraine conflict. Should the statement read hawkish, the Brazilian real could experience near-term support. Despite a potentially more hawkish statement, we believe BCB policymakers are close to ending the tightening cycle and are likely to stop lifting interest rates in Q2-2022, an out of consensus view given how financial markets are currently priced.

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