RIO DE JANEIRO, BRAZIL - The Central Bank has adopted a correct stance in indicating that the treasury's benchmark interest rate should be raised to a restrictive level in the face of inflation expectations above the target, says São Paulo-based Itaú Unibanco, the largest banking institution in Brazil.
In the bank's evaluation, the Selic above the neutral level by approximately 1 point, i.e., between 7.5% and 8%, "seems consistent with the current deviation of the IPCA projections in relation to the target."
However, the bank considers there is a "considerable chance" that the basic interest . . .
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