BCB maintaining rates at 14.25% looks doubtful?

Brazil's FX reserve data released on Friday night revealed that BCB (Banco Central do Brasil) did not in fact intervene on Thursday to support BRL as many originally assumed. Verbal intervention alone was enough to bring USD/BRL from levels around 4.20 to levels around 3.90. USD/BRL closed just below 4.00 on Friday evening.

When both TRY and RUB experienced severe crises in 2014 it took a combination of significant interest rate increases and FX interventions to calm the situation. That being the case, it is rather doubtful that BCB will be able to maintain interest rates at 14.25% as they intend if they want to calm the situation. 

"Markets are also sceptical, 1 year swap rates trade close to 16%. The bottom line is that if BCB want to contain USD/BRL they will have to back up their words with actions", says Commerzbank.