The Fort Worth Press - Brazil's central bank holds 13.75% interest rate amid 'high' inflation

USD -
AED 3.672698
AFN 71.945485
ALL 94.960531
AMD 393.846385
ANG 1.801124
AOA 837.000352
ARS 868.489782
AUD 1.551771
AWG 1.8
AZN 1.698722
BAM 1.83576
BBD 2.017834
BDT 109.678146
BGN 1.832914
BHD 0.376857
BIF 2863.860782
BMD 1
BND 1.361392
BOB 6.92047
BRL 5.230089
BSD 0.999343
BTN 83.424286
BWP 13.880363
BYN 3.270509
BYR 19600
BZD 2.014455
CAD 1.372375
CDF 2804.999968
CHF 0.91155
CLF 0.03476
CLP 959.139721
CNY 7.242904
CNH 7.252865
COP 3914.37
CRC 501.88194
CUC 1
CUP 26.5
CVE 103.497311
CZK 23.679801
DJF 177.961329
DKK 6.996897
DOP 58.973709
DZD 134.593008
EGP 48.258197
ERN 15
ETB 56.783619
EUR 0.937815
FJD 2.27695
FKP 0.802762
GBP 0.807533
GEL 2.665044
GGP 0.802762
GHS 13.442026
GIP 0.802762
GMD 67.898929
GNF 8591.300757
GTQ 7.77274
GYD 209.087752
HKD 7.832649
HNL 24.672655
HRK 7.08016
HTG 132.571793
HUF 369.80985
IDR 16213.15
ILS 3.757303
IMP 0.802762
INR 83.42295
IQD 1309.179651
IRR 42062.50203
ISK 141.149674
JEP 0.802762
JMD 155.755169
JOD 0.708696
JPY 154.690503
KES 131.419549
KGS 89.016501
KHR 4061.442577
KMF 462.57499
KPW 900.00035
KRW 1381.804969
KWD 0.30837
KYD 0.832833
KZT 445.917026
LAK 21309.367374
LBP 89493.241975
LKR 301.830298
LRD 193.195038
LSL 19.150432
LTL 2.95274
LVL 0.60489
LYD 4.876103
MAD 10.12418
MDL 17.898442
MGA 4405.89831
MKD 57.772271
MMK 2098.648395
MNT 3450.000346
MOP 8.062869
MRU 39.706258
MUR 46.52986
MVR 15.449709
MWK 1732.323375
MXN 17.047026
MYR 4.784018
MZN 63.510149
NAD 19.14986
NGN 1075.749595
NIO 36.784997
NOK 11.004255
NPR 133.47882
NZD 1.688975
OMR 0.38498
PAB 0.999352
PEN 3.728775
PGK 3.79767
PHP 57.4865
PKR 278.12632
PLN 4.03895
PYG 7393.467242
QAR 3.640497
RON 4.666699
RSD 109.953726
RUB 93.893009
RWF 1288.636086
SAR 3.751398
SBD 8.440171
SCR 14.389367
SDG 585.999628
SEK 10.907199
SGD 1.361398
SHP 1.26345
SLE 22.847303
SLL 20969.503664
SOS 571.470907
SRD 34.527027
STD 20697.981008
SVC 8.744134
SYP 2512.53037
SZL 19.212683
THB 36.982015
TJS 10.918161
TMT 3.51
TND 3.150996
TOP 2.391649
TRY 32.611099
TTD 6.786184
TWD 32.618006
TZS 2579.354025
UAH 39.789467
UGX 3807.995194
UYU 38.370925
UZS 12689.249946
VEF 3622552.534434
VES 36.296673
VND 25450
VUV 118.722038
WST 2.803608
XAF 615.696599
XAG 0.035382
XAU 0.000422
XCD 2.70255
XDR 0.758877
XOF 615.69082
XPF 112.449768
YER 250.350252
ZAR 19.068403
ZMK 9001.197777
ZMW 25.658907
ZWL 321.999592
  • RIO

    0.2900

    66.97

    +0.43%

  • SLAC

    0.0050

    10.305

    +0.05%

  • CMSC

    0.0100

    23.9

    +0.04%

  • SCS

    0.1100

    11.94

    +0.92%

  • BCC

    -1.0500

    133.6

    -0.79%

  • NGG

    -0.0600

    65.38

    -0.09%

  • JRI

    0.0400

    10.95

    +0.37%

  • CMSD

    0.0900

    24.3

    +0.37%

  • BCE

    0.3800

    32.59

    +1.17%

  • BTI

    0.2300

    29.05

    +0.79%

  • RYCEF

    -0.0750

    4.885

    -1.54%

  • GSK

    0.4800

    39.75

    +1.21%

  • RBGPF

    0.1400

    51.75

    +0.27%

  • VOD

    0.0600

    8.34

    +0.72%

  • AZN

    0.1900

    68.55

    +0.28%

  • RELX

    -0.3600

    41.07

    -0.88%

  • BP

    0.6000

    38.52

    +1.56%

Brazil's central bank holds 13.75% interest rate amid 'high' inflation
Brazil's central bank holds 13.75% interest rate amid 'high' inflation / Photo: © AFP/File

Brazil's central bank holds 13.75% interest rate amid 'high' inflation

Brazil's central bank held its benchmark interest rate at 13.75% on Wednesday, remarking that inflation "remains high" despite receding for three months in a row, just four days before a presidential election.

Text size:

It is the second meeting in a row that the bank's monetary policy committee left the Selic interest rate unchanged after putting the brakes on 12 straight increases.

In a statement, the monetary committee said it remained "vigilant" and that the high interest rate level would be maintained "as long as it takes to control inflation."

The committee did not rule out a "resumption of the cycle of increases" if prices do not lower "as expected." For now, "inflation remains high" despite dropping for several months.

The decision comes as the country braces for a divisive second-round presidential election between far-right President Jair Bolsonaro and leftist former leader Luiz Inacio Lula da Silva on Sunday.

The interest rate decision was in line with market forecasts, which were reflected in a survey of more than a hundred consultants and financial institutions by the Valor economic newspaper.

The benchmark interest rate has remained at the same level since August, when the committee applied the last increase of half a percentage point.

Haunted by a history of hyperinflation, Brazil was among the first countries to start raising interest rates after the monetary easing of the coronavirus pandemic when the Selic stood at a record low of two percent.

Since March 2021, the central bank had rapidly raised its key rate from an all-time low of two percent, including three whopping hikes of 1.5 percentage points from October 2021 to February 2022.

The long period of high inflation in Latin America's largest economy has been fueled by rising global food and oil prices spurred on by the war between Russia and Ukraine.

- Slowing inflation -

This trend has slowed in recent months.

The consumer price index was negative in July (-0.68 percent), August (-0.36 percent) and September (-0.29 percent).

Annual inflation stood at 7.17 percent in September, prior to the first round of the presidential elections on October 2.

The successive declines reduced market forecasts, and inflation is now expected to lower to 5.60 percent by the end of the year, almost half of what was initially projected, according to a survey released by the central bank (BCB) this week.

Bolsonaro has highlighted the "unprecedented deflation" during his campaign.

He is currently polling 45 percent to Lula's 49 percent ahead of the second round, according to Datafolha polling data published Friday.

Economists warn, however, that the negative trend is not yet established and that price increases are still a latent threat.

By keeping the Selic at the current high level, the monetary committee hopes that 2023 inflation will lower to the 3.25 percent target set by the central bank.

Only then can they begin cutting rates, analysts say.

Analysts have warned about the impact of high interest rates on GDP, which is projected to grow 2.76 percent by the end of this year, far from the stagnation that was expected in early 2022, according to the BCB Focus survey.

Brazil is easing up on its interest rate as the US Federal Reserve and European Central Bank have shifted into full-on tightening to curb inflation.

L.Coleman--TFWP