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06/23 14:20

Goldman Sachs: Brazilian Central Bank Expected to Alternate Between Rate Cuts and Holding Steady

On June 23, Goldman Sachs' Alberto Ramos stated that the Brazilian Central Bank may alternate between pausing rate cuts and lowering its benchmark Selic rate. Last week, the Brazilian Central Bank reduced the Selic rate from 14.5% to 14.25%, and its next steps remain unclear. Amid sticky inflation and risks of economic slowdown, the meeting minutes provided some insight into the central bank's thinking. Ramos noted that intermittent rate cuts 'will lead to milder output fluctuations, with inflation converging to target levels by the first quarter of 2028.' He added, 'Overall, in the short-term trade-off between growth and inflation, Copom is more inclined to protect economic activity rather than adopt a more aggressive inflation-focused strategy.'

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