For the sake of confidence in the central bank's independence and thus in credible inflation control, it would certainly be best if today's meeting were to pass off without a hitch. Then, given the still very attractive real interest rate level of over 9%, the start of rate cuts would probably not put undue pressure on the Real.

On the other hand, if there is even the slightest suspicion that the BCB might postpone the start of rate cuts due to the ongoing criticism of the government, this is likely to weigh on the BRL. A foretaste of this was provided by the Real's reaction to the minutes, which some commentators interpreted as an attempt to defuse criticism of the government following the hawkish statement after the rate decision.