Brazil held interest rates steady for the seventh straight time on Wednesday, resisting pressure to slash borrowing costs amid a recession as inflation remains near double digits. In a unanimous vote, the central bank's monetary policy committee, Copom, decided at its last meeting led by governor Alexandre Tombini to keep its benchmark Selic rate at 14.25%, the highest in nearly a decade.
Brazil's interim government on Tuesday confirmed the lead economist of the country's largest private bank to head the central bank, in a further shift away from the interventionist policies that many blame for deep recession and near double-digit inflation.
The elevation of a centrist vice president, Michel Temer, as Brazil’s president amid the impeachment process of Dilma Rousseff is expected to result in a less strained relationship between Brazil and Israel, as well as its Jewish community, Jewish leaders in Sao Paulo said.
Brazil's Vice President Michel Temer could wait until June to appoint a new central bank chief if he takes over the reins of power this week, as part of a gradual transition to replace the bank's eight-member board, his spokesman said on Wednesday.
Brazil's recession will extend into next year, hurting President Dilma Rousseff's efforts to shore up public finances and arrest a sharp increase in unemployment, Itau Unibanco's chief economist said in a report on Wednesday. Ilan Goldfajn forecasts a drop of 2.2% in 2015 and 0.2% in 2016, down from previous estimates for a decline of 1.7% in 2015 and an increase of 0.3% in 2016.
The three-year build-up to the 2014 soccer World Cup is set to boost Brazil’s economy by 1.5% of GDP, according to Ilan Goldfajn, chief economist of the Itau Unibanco Holding, Latin America’s largest bank by market value.