The Monetary Policy Committee of the Central Bank of Brazil decided on January 15th to raise the benchmark interest rate by a larger-than-expected 50 bps to 10.5 percent. It is the seventh straight rate hike aimed at curbing inflation.
The decision was reached by a unanimous vote and follows the adjustment that begun at last April’s meeting.
In December, the inflation rate accelerated to 5.91 percent, up from 5.77 percent in November and 5.84 percent a year earlier due to higher transport and health prices.
On a monthly basis, the inflation rate accelerated to 0.92 percent, the highest rate in more than 10 years.
Central Bank’s President recently said inflationary pressures could be attributed to a weaker real, labor market costs and pressures from the transportation industry.
In 2013, the real depreciated 13 percent, the worst annual decline since 2008.
1/16/2014 12:48:28 AM