Brazil To Cut Rates Further To Ease Credit Conditions

• Fitch has revised its end-2020 policy interest rate forecast in Brazil to 3.25%, from 4.25% previously, expecting an additional 50 basis points of cuts over the coming months.
• Despite pressures from capital outflows, the Banco Central do Brasil will continue to ease monetary policy in order to support credit and economic activity as the economy is pushed into recession due to Covid-19 (coronavirus).
• A range of additional policy measures, such as cuts to reserve requirements and repo operations, will further support liquidity in the financial system.

(Source: Fitch)