MercoPress. South Atlantic News Agency
Brazil central bank raises benchmark Selic rate to 11%
The Copom will release the minutes from Wednesday's meeting April 10 Brazil's central bank raised its benchmark Selic rate to 11% from 10.75% on Wednesday, prolonging its tightening cycle after a surge in food prices that has stoked already high inflation in an election year. The bank's decision was unanimous and left the door open for possible further rate hikes.
Brazil's Central Bank Monetary Policy Committee (Copom) raised the Selic 25 bps to 11.0%, as widely expected by the market, while leaving the door open for possible further rate hikes.
”The Copom (Central bank's Monetary Policy Committee) unanimously decided, at this moment, to raise the Selic rate 0.25% to 11.0% per annum, with a neutral bias,“ policymakers said in their statement. ”The Committee will monitor the evolution of the macroeconomic scenario until its next meeting, in order to then define the next steps in its monetary policy strategy.“
The Copom has in the past used the phrase ”at this moment” to indicate it is uncertain if it will repeat the same dose at its next meeting, which the second line of the brief statement confirms.
It was the second straight quarter-point rate hike, following six consecutive 50 bps increases, and an initial 25 bps hike that began the tightening cycle in April 2013.
This tightening cycle is now the longest in Brazil's modern history, but inflation and inflation expectations have risen nonetheless. Consumer prices are expected to rise 6.30% this year, from 5.91% in 2013, and well above the central bank's 4.5% target, which was last achieved in 2009.
Government policies that encouraged consumption but neglected investment have led to full employment, but also spurred wage increases that outstrip productivity growth, increased imports, infrastructure bottlenecks, and demand-driven inflation. Currency depreciation and the recent spike in food prices have added additional inflation pressures.
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Read all commentsRut ro. Now throw on a little more devaluation and watch the economy be right back to the chaos of the 90s.
Apr 03rd, 2014 - 01:05 pm 0Will they ever learn?
Just a few basic moves Brazil can do to help turn things around.
Apr 03rd, 2014 - 07:42 pm 0Get rid of union law.
Get rid of taxes on companies and reduce the personal rate by 50% from what it is now.
Fine any government employee found guilty of corruption ten times the value of the illegal act.
Second illegal act jail them for 2 years and throw them out of the function.
Get competent people into the finance ministry starting with booting The Liar Mantega out of the door.
No social payments except for illness verified by a physician, or long term physical or mental disability verified by a assessments board for the value of the award.
Unemployed to get help with basic life maintaining expenses only and to last a maximum of one year.
No payments to be made to those unwilling to work. Take their children into care to break the link with not working.
Expenses to move to another area to find work.
No market can flourish with both or one hand tied behind Mr. Markets back for the simple reason Mr Market will break free and wreak revenge on those that want to screw him. You watch what is about to happen if Brazil does not move and soon on these points but we ALL know it won’t (even if it could).
@ CryingR
Apr 03rd, 2014 - 08:18 pm 0The unvarnished view of English socialism, capitalism and democracy.
Our world is different from yours.
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