Quotes from Bank of Cyprus:
-The new re-elected president Dilma Rousseff and her new team have a mount reforms ahead as the economy edged away of its recent fall into recession. The newly elected government is faced with its past history, past performance and ideological preference. The pre-election debate was consumed on Brazil's investment revival through investment-friendly policies that will eventually elevate investor's sentiment.
-Taking into account the economic realities coupled with low energy prices, we do not expect any substantial improvement. Inflation is running stubbornly above 6% and the expectation is that it will decline throughout 2015 as energy and commodities prices dropped.
-However, as the BRL (Brazilian Real) is hitting 2005-lows against the Dollar, the intervention from the BCB (Brazil Central Bank) was unavoidable as it raised interest rates (SELIC that stands for Special System of Clearance and Custody rate) by 50bp to 11.75% on December 3rd. Therefore, upside risks from inflation will remain elevated regardless of expectations.
The material has been provided by InstaForex Company – www.instaforex.com