Brazil's central bank 1% rate hike, as expected
Banco Central do Brasil hikes its benchmark interest rate to 6.25% from 5.25%.
Headlines via Reuters from the statement (bolding mine):
- decision was unanimous
- sees rate hike of the same magnitude at next meeting
- in the current phase of rate hike cycle, this pace of adjustments is best to guarantee the anchoring of inflation expectations
- sees robust economic recovery in the second half of year
- baseline scenario and balance of risks indicate that an interest rate hike cycle should advance into contractionary territory
- elevated fiscal risk creates an upward asymmetry in the balance of inflation risks
- the current pace of rate hikes will allow the committee to obtain more information regarding the state of the economy and the persistence of shocks
- price increases for industrial goods have not subsided and should remain a pressure in the short run.
- new round of market discussion regarding inflationary risks in advanced economies could result in a challenging environment for emerging economies