Brazilian market raises benchmark interest rate forecast to 11.25 pct

BRASILIA, Sept. 9 (Xinhua) — Brazil’s financial market raised the benchmark interest rate forecast for the end of the year from 10.50 to 11.25 percent and from 10 to 10.25 percent for 2025, the Central Bank of Brazil said Monday.
According to the bank’s weekly Focus survey of financial analysts at the country’s main financial institutions, the forecast reflects the expectation that the bank’s Monetary Policy Committee (Copom) will raise the benchmark rate based on inflation expectations.
The next Copom meeting is scheduled for Sept. 17-18, with the rate currently at 10.50 percent.
Regarding inflation, analysts raised their forecast from 4.26 to 4.30 percent for the end of 2024 and maintained it at 3.92 percent for 2025, in both cases the forecasts fall within the official target rate of 3 percent with a margin of error of 1.5 percentage points.
Regarding GDP, analysts once again upgraded their projection from 2.46 to 2.68 percent for 2024 and from 1.85 to 1.90 percent for 2025.
Brazil’s currency, currently trading at 5.62 reals to the U.S. dollar, is expected to trade at 5.35 by the end of 2024 and at 5.30 by the end of 2025.
The trade balance should see a surplus of 83.53 billion dollars this year and 79 billion dollars in 2025, said analysts.
Foreign direct investment in Brazil is expected to reach 71 billion dollars in 2024 and 73.5 billion dollars in 2025. ■