Brazil’s Central Bank would implement an interest rate cut, currently at 15%, starting in March if the projected inflation rate for 2026 of 3.0 % is maintained.

During the recent meeting of the Monetary Policy Committee (Copom), in the last week of January, it was agreed to maintain rates at 15 %, the highest level in 20 years. The implementation of a cut next month will depend on whether the inflation forecasts hold true.

According to the Copom minutes, there is “a moderation in the pace of economic activity, consistent with the adjustment cycle, and an improvement in the behavior of food, energy, and service prices.”

However, it is noted that “the fiscal trajectory and the international scenario remain risk factors, especially due to recent market volatility and the persistence of high interest rates in advanced economies.”

The Brazilian economic outlook remains uncertain, awaiting developments in the price dynamics. The Copom will evaluate the possibility of easing interest rates at its next meeting, should the appropriate conditions arise.

M.Pino

Source: bancaynegocios

(Reference image source: rc.xyz NFT gallery on Unsplash)

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The president of Venezuela, Nicolás Maduro, referred to the country’s inflation between January and May of this year as the lowest in 39 years. The inflation rate for said period was 7.8 %.

The statement was made by the president during the broadcast of the program “Con Maduro +” last week, considering that the figure represents historical data for the country.

The president of Venezuela emphasized that “if this trend continues, it could surprise all of South America with “minimal inflation and sustained economic growth.”

According to data from the Central Bank of Venezuela (BCV), “the prices of products and services increased by one and a half percentage points in May, an improvement compared to the previous month, when inflation was 2 %.”

Government actions to avoid the devaluation of the bolivar

At the beginning of last June, the Venezuelan government confirmed that it has intensified its efforts “to avoid a further devaluation of the bolivar and a spike in inflation before this year’s presidential elections.”

According to the Colombian newspaper La República, nearly USD 140 million was injected by the BCV into the foreign exchange market during the last week of May due to the weakening of the bolivar on the black market in addition to the increase in the gap between the official exchange rate and the parallel.

Regarding inflation, Maduro tries to keep it in single digits by stabilizing the currency and reducing public spending, despite the proximity of the July 28 elections, a period during which the circulation of money in the streets increases.

According to a Bloomberg report, “the government has preferred to sell more dollars to maintain the official exchange rate around 36.5 bolivars, avoiding a further devaluation of the national currency.”

M.Pino

Source: cointelegraph

(Reference image source: Unsplash+, in collaboration with Frank van Hulst)

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