Brazil's central bank - as expected - boosts the benchmark Selic rate by 25 basis points to 11%, but hints an end to the rate hike cycle is nearing. "There will probably be another increase at the next meeting, if there's no surprise, but the continuity of the cycle beyond that is unlikely," say economists at Banco Fator.
The central bank began its rate hike cycle about one year ago amid persistently high inflation, and with the Selic then at 7.25%. Unsurprisingly amid the tighter policy, the Brazilian stock market has been one of the poorer performers among major markets during this time. Perhaps anticipating the end of rate boosts, the Bovespa logged sharp gains over the past few weeks. The iShares MSCI Brazil Index ETF (EWZ) is up more than 20% since early February.