- Brazil is escalating efforts to stabilize investor sentiment after a recent central bank decision created market confusion by lowering interest rates while simultaneously warning of deteriorating inflation.
- The Brazilian Treasury canceled a scheduled auction of NTN-B inflation-linked bonds originally set for Tuesday to mitigate market volatility.
- The central bank has moved to inject liquidity into the spot currency market as local rates continue to sell off following the 25 basis point rate cut.
Quotes
“The move comes after markets sold off last week following the central bank’s decision to lower interest rates by 25 basis points while simultaneously warning that the inflation outlook had deteriorated.”