At today's monthly monetary policy meeting, the central bank's Monetary Policy Committee decided to keep the monetary policy rate at 6.00% for the twelfth consecutive month. The decision was in line with our call and market expectations (according to the BCP's survey).
On the domestic front, the statement highlighted the stability of inflation expectations for the monetary policy horizon, which remain at 3.5%, in line with the revised lower central bank target. Therefore, we estimate that the real ex-ante policy rate remains at 2.5% (using expectations for the monetary policy horizon), compared to the BCP's neutral real interest rate range of 1.3%-2.6%.
In the global context, the BCP highlighted the fact that the Federal Reserve kept the federal funds rate unchanged while the international prices of oil and the main agricultural commodities decreased in the last month, due to better supply prospects, and the forecast of lower world demand because of greater restrictions on international trade. On the other hand, wheat prices have increased, explained by adverse weather conditions.
Our take: We expect no change in the policy rate through 2025. A lower inflation target and our expectation of no rate cuts by the Federal Reserve limits the room for further easing. We continue to envisage a monetary policy rate of 6.0% for YE25. The next monthly monetary policy meeting is scheduled for April 23.