Brazil's central bank 1% rate hike, as expected

Author: Eamonn Sheridan | Category: Central Banks

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




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