FXStreet (Delhi) – Prashant Newnaha, Rates Strategist at TD Securities, expects the Selic rate to be kept on hold at 14.25% in Brazil. Key Quotes “The press statement accompanying the October COPOM meeting repeated the formula “that the maintenance of this basic interest rate level, for a sufficiently long period, is necessary for the convergence of the inflation to the target in the relevant horizon for the monetary policy”. Inflation is continuing to creep up, with November IPCA-15 reaching 10.28% Y/Y, but inflation should start falling next year, if only because of base effects. The DI curve is pricing in a lowish chance of a 25bps hike at today’s meeting, but is continuing to price in large rate hikes further out.” “Our central expectation is that 14.25% will represent the high point in the tightening cycle and that rates will start being cut towards the end of next year. However, in the near-term the risk to rates is to the upside.” For more information, read our latest forex news.