Brazil’s central bank likely to hike rates by another 50bp

Data to the middle of the month show that Brazil inflation has continued to climb. At the same time, the minutes from last month's COPOM meeting, in which the Selic was also hiked by 50bp, gave no hint that policymakers are about to slow the pace of tightening, despite mounting evidence that the economy contracted in Q1.

Capital Economics expect COPOM to raise the benchmark Selic interest rate by another 50bp to a six-year high of 13.25%. (Decision due on Wednesday)