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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (53889)	8/22/2009 12:05:53 PM
From: elmatador	Read Replies (1) \| Respond to of 220139

Why do you correlate BRL topping with a need to increase rates?

To: Haim R. Branisteanu who wrote (53889)	8/22/2009 12:50:44 PM
From: elmatador	Read Replies (1) \| Respond to of 220139

Brazil Central Bank ensures inflation target. Economy must grow production must increase else demand inflation kicks in. To tame demand inflation, production must increase, production increases creates bottlenecks that need to be cleared by more investment. All that needs Gargantuan amount fo capital (capital that was not invested between 1980 and 1994). If inflation is within target, economy is not heating up, CB drops interest rates. Capital gets cheaper. More investment. More consumption. The combination of factors: low inflation, low interest rates is a first in the country's history. Therefore only expect increase on interest rates if economy heats up and inflation tips up. Since Lula needs grow (election 2010), the impulse of this year policies will skyrocket in the coming quarters.