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BRAZIL: Economists Trim Interest Rate Forecast By Year-end To 7%

(Agencia CMA Latam) - Economists polled by the Brazilian central bank cut to 7% their estimates for the country's benchmark interest rate (Selic) by year-end, from 7.25% last week. For 2018, estimates decreased to 7.25%, after four weeks stable at 7.50%.

Average interest rate estimates for 2017 remained at 9.84%. For 2018, the forecast for the average interest was lowered for the seventh week in a row, to 7.03%, from 7.13% last week.

Last week, the Brazilian central bank's Monetary Policy Committee (Copom) cut the country's benchmark interest rate to 8.25%, from 9.25%, in line with market expectations, and signaled that it intends to keep loosening monetary policy in the next few meetings, but at a slower pace.

"For the next meeting, if the basic scenario evolves as expected, and because of the stage of the loosening cycle, the Committee sees as appropriate a moderate reduction in the magnitude of monetary easing," the committee said.

For the October meeting of the Copom, market players point to a cut of 0.75 pp in the Selic, which means a reduction in the monetary easing cycle's rhythm, taking the rate to 7.50% per year.

by Agencia CMA Latam

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