Brasília, March 1, 2004 (Agência Brasil - ABr) - The expectation of the financial market with regard to the prime interest rate (Selic) is less optimistic this week than last, when analysts predicted a drop from the current 16.5% to 13.75% by the end of the year. Now, after two months in a row without reductions in the Selic, the market raised its average forecast to 13.82% and maintained its predictions for a R$ 3.10 exchange rate at year's end.

The Focus Bulletin, released today by the Central Bank (BC), also reveals a slight rise in expectations for this year's inflation, as measured by the Broad Consumer Price Index (IPCA), from 6% last week to 6.01%.

The prospects for this month's inflation remain at 0.70%, with the possibility of dropping to 0.43% next month, when the market hopes that the Monetary Policy Committee (Copom) will lower the Selic to 16.30%. (DAS)