There are signs of inflation ahead in Brazil.

Some of the most interesting news of the week came from increasing inflation concerns in Brazil. The country’s central bank has adopted a wait-and-watch policy toward interest rates as it decided to maintain the key benchmark (Selic) rate at 10.75%. Its recent measures to curtail credit growth by hiking bank reserve requirements may, however, not be able to tame inflation in the short term, as seen from the recently 5.47% cpi growth versus the 4.5% target.

I expect Alexandre Tombini, the incoming central bank resident, to give the Selic rate a good bump upward, given the backdrop of robust domestic demand, low unemployment levels and a rising inflationary outlook.

Guess which stocks are likely to be hurt by this?