RIO DE JANEIRO, Dec 5 Brazil's interest rate
futures edged higher on Thursday as minutes of the central
bank's latest monetary policy meeting gave no clear signs to
investors that policymakers will slow the pace of monetary
The minutes of last week's monetary policy meeting, during
which the central bank increased its base Selic rate by half a
percentage point to 10 percent, highlighted the lagging effect
of recent interest rate hikes on inflation, which could be
interpreted as a sign that policymakers are considering being
less aggressive on future monetary tightening.
But the document also offered a cautious view on the
prospects for prices, saying inflation remained resilient and,
in that context, the bank's monetary policy committee, or Copom,
considered it appropriate to continue the pace of rate hikes.
"The minutes did not bring clear signs that interest rates
will rise at a slower pace from now on, leaving open the
possibility that we have another 50-basis-point hike in
January," said Silvio Campos Neto, an economist with Tendencias
consultancy in Sao Paulo.
Many investors expected the central bank to be more dovish
in its minutes after it changed the wording of a widely watched
statement issued last week after the decision on the Selic.
At that time, the bank removed a previous reference to
monetary policy setting inflation on a declining trend for next
year. The change caused analysts to bet the bank would slow down
or even halt its monetary tightening cycle as policymakers
appeared to be putting more emphasis on growth rather than
"The full minutes suggest that this interpretation may have
been premature," Neil Shearing, chief emerging markets economist
with Capital Economics in London, wrote in a research note.
Most traded interest-rate contracts at 1211 GMT
month ticker last(%) previous change(p.p
JAN5 10.71 10.67 0.04
JAN6 11.91 11.88 0.03
JAN7 12.45 12.45 0.00