BRASILIA, June 20 (Reuters) - The Brazilian central bank is likely to hold interest rates at an all-time low on Wednesday despite a currency sell-off, though it may take a more hawkish tone in its policy statement.
The bank’s monetary policy committee, known as Copom, is widely expected to keep the benchmark Selic interest rate at 6.50 percent at the end of a two-day meeting, according to a Reuters poll of economists.
The decision is expected to be announced at 6 p.m. local time (2100 GMT) on Wednesday.
The consensus of all but one of 38 economists polled suggests assurances by central bankers that they will not use monetary policy to fight off currency depreciation have sunk in.
Policymakers have repeatedly said currency moves will drive monetary policy only if they affect current inflation or expectations for future price hikes. With double-digit unemployment rates keeping a lid on inflation, that is unlikely to be of much concern.
Still, the bank may choose to take a hawkish swing in its rhetoric after a nationwide truckers’ strike, concerns over the government’s fiscal outlook and this year’s presidential elections knocked the Brazilian real to a two-year low.
The latest Reuters poll suggested product shortages due to the strike likely pushed Brazil’s inflation rate back up to the bank’s target range, after ending last year below the bottom-end of the range for the first time ever. (Reporting by Bruno Federowski; Editing by Dan Grebler)
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