Bank of America upgrades Brazil rating to overweight as it forecasts 11.25% rate by end of 2027
The US investment bank raised its stance on Brazilian stocks following a revised interest rate projection that lowers expectations for the central policy rate compared to current market pricing.
The Bank of America increased its equity recommendation for Brazil from neutral to overweight, according to a report released Tuesday. The upgrade stems largely from a more aggressive forecast for interest rate cuts within the country. Previously, the bank projected the Brazilian Select Interest Rate would reach 12.75% by the end of 2027. The new projection places that figure at 11.25%. This anticipated level is below the approximately 14% currently priced into markets. Bank of America analysts stated that economic activity deceleration and reduced inflation risks could support a more substantial monetary easing cycle. The rating adjustment coincided with strong gains in the Brazilian stock market, where the Ibovespa index climbed 1.34 percent to 187,644 points by mid-morning on Tuesday. High commodity prices for oil and iron ore supported the index during an extended holiday weekend when presidential election polls were being reviewed by investors.
