MNI BRIEF: Next BCB Move Likely A Rate Cut - Deputy David

Central Bank of Brazil deputy governor for monetary policy Nilton David said Tuesday that hiking interest rates is no longer within the board’s scenario distribution and that, if they are successful, the next move will be an interest rate cut, the question is when.

He stressed that until the September decision there was still a probability of raising interest rates within the board’s scenario distribution, but that this changed at the last meeting.

"The possibility of raising interest rates was not zero (in the previous meeting). It was within the scenario distribution, even if it wasn’t the baseline. This evolved and, in our last communication, we basically said that even though the Central Bank will not hesitate to raise rates if necessary, today raising rates is no longer in the baseline scenario nor in the distribution," David said at an event sponsored by EuroFinance.

"Today the expectation, if we are successful, is that the next move will be a rate cut. The only question is when," he added. (See MNI BCB WATCH: Keeping 15.00% Rate For Longer Will Be Enough)