Brazil set to hold interest rates ahead of policy changes

miércoles 29 de octubre de 2014 01:00 GYT
 

By Alonso Soto

BRASILIA Oct 29 (Reuters) - Brazil's central bank will likely keep interest rates steady for a fourth straight time on Wednesday, holding its ground until President Dilma Rousseff announces changes to economic policy following her narrow re-election victory.

All 43 economists surveyed in a Reuters poll expect the central bank to keep its benchmark Selic rate unchanged at 11 percent.

After narrowly defeating centrist Senator Aecio Neves on Sunday, Rousseff has pledged to change her economic team and alter policies to turn around an economy that cost her support among Brazil's middle class voters.

The central bank will likely stay put for now until those changes are unveiled, analysts say.

"(The bank board) will be looking to indications of changes in the economic policy mix, particularly changes on the fiscal side, which will impact their decision-making going forward," said Blue Macellari, senior Latin America strategist for TD Securities in New York.

"The real question is whether the bank will have a more supportive fiscal environment."

Markets are eagerly awaiting Rousseff's nomination of a new finance minister. Whomever takes the job will face the daunting task of regaining the trust of investors worried about growing state intervention and the country's financial health.

Rousseff is considering a former aide, her chief of staff and a businessman to replace Finance Minister Guido Mantega, who will step down at the start of her second four-year term on New Year's day.   Continuación...