BCB rate hikes likely in the coming months to support BRL

President Dilma Rousseff finally executed a long awaited cabinet reshuffle on Friday which saw 8 ministries cut and the remaining cabinet rearranged to bolster support within her coalition. 

"The cuts are of course a purely symbolic measure and will do little to fill the gaping hole in the public finances, but symbolism matters in austere times such as this. The reshuffle should prevent any effort to impeach her in the short term", states Commerzbank. 

Markets didn't pay much heed in any case, 1 year swaps still trade well above 15%, which indicates that investors still expect rate hikes from the central bank in the coming months to support BRL.