COPOM rules out cutting the SELIC

The minutes of last week's monetary policy meeting released today show that the Monetary Policy Committee (COPOM) remains confident on the convergence of inflation to the target in the "final quarters of the forecast horizon" (i.e. beginning of 2016), in spite of shorter term pressures. More importantly, the monetary authority affirmed that the strategy to ensure this convergence "does not include reducing the monetary policy instrument". This surprisingly explicit statement is in line with our view that any adjustment in the SELIC rate will be to the upside, although very likely only from the beginning of 2015 onwards.

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