LatinNews Daily - 9 August 2023

* Brazil’s central bank (BCB) has released the minutes of its monetary policy committee (Copom) meeting last week, in which it decided to lower the benchmark interest rate (Selic) by 0.5 percentage points. The minutes confirmed that the committee members all agreed with the decision to begin the cycle of monetary policy easing and “unanimously anticipated cuts of 0.50 percentage points in the next meetings”. Despite welcoming the recent positive signs in the deflationary process, Copom did recommend “caution” due to the “inherent volatility of food and industrial goods components”, as well as citing risks related to the El Niño weather phenomenon. Copom’s minutes also reiterated that recent projections for annual inflation were still not within the target range of 3.25% +/-1.5. According to the latest Focus bulletin, the BCB’s weekly survey of private sector analysts (last published on 7 August), 2023 is expected to close the year at 4.84% inflation, unchanged since the previous week’s forecast. However, the experts consulted for the bulletin did lower their projection for the Selic since the previous week, from 12.0% to 11.75% by the end of the year.