Rate-cutting race between Russia and Brazil may be out of central banks’ hands
Moscow — The race to ease monetary policy in Russia and Brazil may come down to factors neither of the central banks can control. Even after months of rate cuts, the two economies continue to endure some of the world’s highest borrowing costs when adjusted for inflation. While both countries are still consumed by crises as they try to put two years of recession behind them, the political turmoil gripping Brazil leaves its central bank facing a tougher task ahead, according to Morgan Stanley, Capital Economics and Renaissance Capital. For Morgan Stanley, Russia’s "domestic political stability and a sustainable debt situation" simplify the central bank’s job after it delivered only three rate cuts totaling one percentage point since September. That compares with four percentage points of monetary easing in Brazil over the same period. Brazil’s 10.25% key rate will end the year at 8.5%, while Russia’s benchmark will reach 8.25%, from the current 9%, according to the median forecasts in...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.