Brazil’s High Interest Rates (Segura-Ubiergo)

The puzzle of Brazil’s high interest rates by Alex Segura-Ubiergo published by IMF. “This paper highlights that real interest rates in Brazil have declined substantially over time, but are still well above the average of emerging market inflation targeting regimes. Going forward, the paper shows that Brazil can converge towards lower equilibrium real interest rates if domestic savings increase to the level of other emerging market countries.”