Brazil’s decision to continue cutting interest rates despite the fact that inflation is running at a five-year high remains as controversial as ever. Nonetheless, on balance we think that the central bank’s judgement that the greatest near-term threat to the economy is slowing growth not rising inflation will ultimately prove to be correct. Indeed, we expect other central banks in the region to follow Brazil’s lead and cut interest rates over the coming months and quarters. Mexico looks like the most obvious candidate to move next, although we expect cuts in every country in the region over the first half of 2012.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services