HOME ZACKS RESEARCH FUNDS PORTFOLIO BROKER RESEARCH MARKETS SCREENING EDUCATION SERVICES
Zacks Rank    Equity Research    Premium Home    My Account    Help    

Zacks Education
Visit Zacks'
Education section for investing guides and other free resources to make you a better investor.
Quote:
Login Free Membership
Search:

 
Analyst Blog  

Brazilian Central Bank Cuts 100 bps!

June 11, 2009 | Comments: 0
Recommended this article (1)
TAM | VIV | CIG | ELP
Print    Share

Last night, the Brazilian Central Bank announced an amazing decision when it decided to cut domestic rates by 100 basis points to 9.25% per year.

Until just several days ago the market was expecting a cut of 75 basis points. However, after the release of the better-than-expected GDP numbers a few days ago the market changed its expectation to just 50 basis points.

Considering the orthodox bias of the Brazilian Central Bank, we were expecting a 50 basis points cut, too. The decision was not unanimous -- among the eight directors with powers to vote in the meeting, six directors voted for 100 basis points cut and two voted for 75 basis points.

Despite the bold decision, the statement after the meeting said that any additional cuts in the near future will be implemented in a more “parsimonious way," thus new cuts should be much less aggressive.

This is the first time in more than 30 years that Brazil has reached a single-digit interest rate.

Despite this aggressive move, we maintain our expectation for year-end interest rate in Brazil between 8.5% and 9%. After this remarkable decision, we reinforce our positive view on companies focused on the Brazilian domestic market, including TAM (TAM - Analyst Report), Vivo (VIV - Snapshot Report), Cemig (CIG - Analyst Report) and Copel (ELP - Analyst Report). 

Email

Print

Share

RSS

Rate Pos

Rate Neg

Comment
Read/Post Comments (0) | Recommended this article (1)
 Posting Comment...
There was a problem posting this this comment. Please try back later.
[CLICK TO CLOSE X]
Comments (Limit 1000 Characters - Used: 0)
Display Name: Email Address:  
 Loading Comments...
Be the first to comment on this article!
Best Stocks. Best Insight. Join Now...it's FREE!
Over 550,000 investors look forward to the timely insights in our email newsletter; Zacks Profit from the Pros. In each daily issue you will find:
  • Free  Four Zacks #1 Rank "Strong Buy" Stocks
  • Free  Timely Market Commentary
  • Free  Wealth Management Tips
  • Free  Profitable Strategy Screens
  • Free  Bull and Bear Stocks of the Day
Zacks FREE Registration

More Zacks Resources

Market Summary Nov 26, 2009 08:00 am ET
DJIA 10464.4  30.69 0.29%
NASD 2176.05  6.87 0.32%
S&P 500 1110.63  4.98 0.45%
Sponsored Links