Societe Generale strategists comment from Brazil’s central bank Banco Central do Brasil (BCB) officials describing March’s 25 bp Selic cut as the start of a calibration process rather than an easing cycle. They stress commitment to the 3% inflation target and downplay the recent break of USD/BRL below 5.00, leaving the scale of future adjustments open and data‑dependent ahead of the April 29 COPOM meeting.

BCB stresses inflation target over FX

"In EM, Brazil central bank monetary policy director Nilton David last week emphasized the importance of meeting the 3% inflation target and characterised the cautious 25bp Selic rate cut in March as the start of a ‘calibration process’ and not easing."

"Crucially, he asserted that the BCB does not count on real appreciation to deliver disinflation, implicitly downplaying the break of USD/BRL below 5.00."

"Fellow BCB official Paulo Picchetti noted that the scale of policy calibration is open with ample scope for data to reshape views ahead of the COPOM meeting on 29 April."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)