Brazilian Central Bank's commitment to keeping local interest rates low for a prolonged period likely means inflation will run at an annual rate of 5.5% through 2014, says Espirito Santo Investment Bank. October inflation was 0.59%, pushing rolling 12-month rate to 5.45%. "If we do not see any adjustment in the monetary policy stance in the future, inflation is unlikely to decelerate," bank says, adding that Brazil's inflation scenario is "worrisome." Central bank indicated last month that rate-cutting cycle was at an end, saying local rates likely to stay at record-low 7.25% for "sufficiently prolonged period."
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