MercoPress, en Español

Montevideo, July 4th 2022 - 03:26 UTC

 

 

Brazil raised the basic interest rate 50 basic points to 11.75%

Thursday, December 4th 2014 - 05:03 UTC
Full article 2 comments
Tombini had warned that the bank must 'maintain especially vigilant' monetary policy Tombini had warned that the bank must 'maintain especially vigilant' monetary policy

Brazil's central bank on Wednesday raised its key interest rate by 50 basis points to 11.75%. The rise came on the back of a one quarter point rise just over a month ago which was the first since April and in the wake of populist Dilma Rousseff's re-election as president, who last week appointed a new finance team to tackle rising inflation.

 The government kept the main Selic rate on hold at 11% for much of the year from April but had to make adjustments after inflation moved just above a government target ceiling of 6.5%. The government official target is 4.5%.

Industry, meanwhile, wants lower rates to kick start a recovery with Brazil in recession and suffering a fourth straight year of low growth with GDP set to grow barely above zero this year.

Prior to Wednesday's decision, analyst Andre Ferreira of Futura was one market observer who did forecast a half-point increase, “given inflation is very high.”

He added he believed 2015 would see further rises of a total 1.25 points.

Central bank chairman Alexandre Tombini warned last week that Brazil must “maintain especially vigilant” monetary policy to keep inflation in check and the eight-strong board reiterated as much following their decision.

The official release from the bank said that “Copom decided unanimously to intensify, at this moment the rate of adjustment of Selic and raised it 0.50 pp to 11.75%”.

“Considering the cumulative effects and mismatch of monetary policy with other factors, the Committee understands that the monetary policy additional effort tends to be implemented with parsimony”.

Categories: Economy, Politics, Brazil.

Top Comments

Disclaimer & comment rules
  • ChrisR

    Tromboney will be playing the same old sad song for the next few years unless something positive is done for the economy.

    Gagging DumbAss Dilma would be a good start.

    Everytime she opens her yap something bad happens to the financial system.

    Dec 04th, 2014 - 11:03 am 0
  • Jack Bauer

    @1 ChrisR
    Definitely bad news for Brazil's less privileged classes (Dilma's voters...serves them bloody well right), but I ain't complaining..... means a better return on investments...

    Dec 04th, 2014 - 04:08 pm 0
Read all comments

Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!