Good morning! Today, we explain the Central Bank’s balancing act between inflation and growth. Jair Bolsonaro’s next move to counter the crisis. Brazil moves to comply with OECD requirements and enter the carbon market.
Balancing inflation and recession
As we expected, the Brazilian Central Bank hiked benchmark interest rates by 1 percentage point to 11.75 percent yesterday — a five-year peak. And another 1-point increase is on the schedule for the May 3-4 meeting of the bank’s Monetary Policy Committee, “given inflation projections and the risk of a de-anchoring of long-term expectations.”
Why it matters. In its attempt to put...