Brazil: rate rise unlikely in Q1 2010

Minutes from last week’s central bank meeting have countered rumours of an early rate rise in Brazil. The dovish notes forecast a “gradual recovery” with inflation “contained”. While the bank’s inflation forecast has risen since October, at 4.5 per cent it is hovering about the midpoint of the target range. The market reaction suggests traders do not expect a rate rise in the first quarter next year, meaning rates will remain at their record low of 8.75 per cent.

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