Inflation in Brazil and Colombia around the upper limit of the target range, with no expected changes in the MPR

Inflation in Brazil remains at the upper limit of the central bank's target range, leaving little room for manoeuvre for the central bank despite the weakening economic activity. Meanwhile, inflation in Colombia came out slightly above the central bank’s target although the core index was better, and as long as there are no surprises in activity, we estimate that the MPR will remain unchanged at the next meeting. In Chile, economic activity in July was better than expected, in the absence of upside surprises in inflation we expect a 25bp cut in the MPR at the September meeting. The MPR in Mexico was left unchanged and Banxico adopted a neutral tone since the downside risks to activity have decreased while inflation has increased slightly; we estimate that the pause in MPR will continue for the remainder of the year.

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