Fynsa
The probability that the process of convergence to inflation will be interrupted or definitely turned around has fallen significantly, but there are still elements of risk to monitor.
Speeches and communications from the Central Bank Board have only been along one line: it is still too early, risks are high and policy error can be very costly.
We maintain our expectation that possible movements in the TPM will have to wait until September.
Adjustment will continue and a reduction in domestic demand is a necessary condition to reduce inflation and bring the current account deficit to more sustainable levels.
The Central Bank decided to keep the rate at 11.25. The question now is when there will be news on this front.
The important question that arises with respect to the Central Bank's policy is how long monetary tightening will be on hold.
We must not forget that, once the immediate imbalances have been resolved, the growth capacity of our economy is very low.
You may say I am a dreamer: economic policies work and eventually we will return to equilibrium. It's not free, though, like nothing else in life.
The Central Bank decided to increase the rate to the maximum level of this cycle, which eventually generated dissent among the board members.
The outcome of the plebiscite should have a positive impact on the markets, under the assumption of lower uncertainty and risk premiums in the future due to the expectation of a more moderate new constitution.
