The Brazilian real weakened to 4.95 per USD, pressured by a rebound for the USD, while markets digested the latest inflation report showing that the country’s annual inflation rose to 4.61% in August from 3.99% in July. Despite the increase in inflation, the rate was below estimates, affirming the central bank’s plans to continue cutting interest rates. The recent 50 bps cut brings the Selic rate to 13.25%, one of the highest real-interest rates globally. However, projections for Brazil’s GDP growth in 2023 have been revised upward, lending credence to more hawkish rhetoric.