Brazil Signals Readiness to Extend Interest Rate Increases

Brazil’s central bank raised the benchmark lending rate for a fourth straight time and signaled it is prepared to increase borrowing costs further, bucking economists’ projections.

Policy makers kept a pledge to raise borrowing costs for a “sufficiently long period” to bring inflation back to target in 2012, in a statement accompanying yesterday’s decision to boost the Selic a quarter-point to 12.25 percent. Analysts had expected the rate to reach 12.50 percent in July and remain there until year-end, a June 3 central bank survey said.