Turim’s Insights

During April’s webinar, our team discussed the impacts of the new Covid-19 wave on the Brazilian economy and explained how the market is evaluating the Central Bank’s interest increase cycle.

Nelson Abrahao, our strategist, highlighted that the pandemic continues to generate bad numbers for the country’s economy. “Data from the Central Bank show a strong drop in services and supermarkets as well. This retreat is likely linked to the end of emergency aid at the end of last year. Now, the aid will return, but even so, we expect a slowdown in activity in the coming months”, said Abrahão.

About the Selic, the strategist commented that the Central Bank started a stronger hike in interest rates at the beginning so that the total level of monetary adjustment is lower. However, Abrahão highlighted that there is a question whether the total monetary adjustment will in fact be smaller given the higher numbers of inflation and the Brazilian fiscal situation.