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LatinNews Daily - 04 June 2024

In brief: Market experts raise forecast on Brazil’s interest rates

*Brazil’s central bank (BCB) has released the latest edition of the Focus bulletin, a weekly survey which contains the forecasts of private sector economists and analysts. The experts consulted by the BCB projected that the country’s benchmark interest rate (Selic) will be lowered to just 10.25% by the end of 2024. In the previous week’s edition of the bulletin, the Selic forecast for 2024 was 10.00%. In the most recent meeting of the BCB’s monetary policy committee (Copom), which was held in May, Copom decided to lower the Selic from 10.75% to 10.50%, slowing down the cycle of rate cuts in which the Selic had been lowered by 0.5 percentage points in every Copom meeting since August last year. However, with annual inflation projections being raised, market analysts expect Copom to halt the cycle of rate cuts at some point this year. The annual inflation forecast in the latest Focus bulletin was 3.88%, up from the 3.86% forecast in the previous week’s edition and from the 3.72% forecast from one month earlier.

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