The weekly roundup: Your go-to guide for the economic events you may have missed in Brazil

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In the second week of April, the Central Bank of Brazil’s rate setting committee decided to cut the interest rate by 100 basis points; other data showed retail sales dropped in February.

Due to widespread disinflation, the Monetary Policy Committee (the Copom) decided to step up the pace of interest rate cuts

The Copom decided to reduce the Selic rate by 100 basis points (bps) to 11.25% per year – in line with market consensus. After a cut of 75 basis points at its last meeting (in February), the Copom unanimously decided to increase the pace of rate cuts to 100 bps. In its statement after the decision, the Central Bank maintained its assessment on economic activity, noting signs of economic stabilisation in the short term.

Concerning projections, the current Selic forecast of 8.5% per annum is compatible with inflation at the centre of the target in 2018. However, this is lower than the rate previously projected (at 9% per annum) by the Central Bank. The discussion surrounding the possibility of reducing the structural interest rate was also maintained, taking into account the successful implementation of fiscal reforms, especially pension reforms. In March, IPCA inflaton slows to its lowest level in five years.

“Inflation developments remain favourable while available evidence suggests a gradual recovery of economic activity during the course of 2017.”
– Central Bank of Brazil

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Retail sales in Brazil unexpectedly drop by 0.2% in February, reports IBGE

Sales fell by 0.2% in February compared to the previous month, reported the Brazilian Institute of Geography and Statistics (IBGE), undershooting market expectations of a 0.3% increase. In comparison with the previous year, the decline was 3.2% – the 23rd consecutive fall.

The IBGE also revised data from January over the previous month in which sales increased by 5.5% after an original fall of 0.7%, as it updated sector weights and started to use 2014 for the basis of the survey, instead of 2011 used previously.

According to the IBGE, hypermarkets, supermarkets, food products, beverages and tobacco sector, which has a significant weight in household consumption, fell 0.5% in February compared to January, after it had climbed 8.1% in the monthly comparison. On the other side, sales of furniture and appliances gained 3.8% in the month.

That was last week, but let’s not dwell on the past, make sure you click here to see what is happening in the third week of April.

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