Brazil Says Impact of ‘Intense’ Rate Hikes Is Still to Be Seen
- Central bankers raised interest rate to 12.75% last week
- With inflation rates rising, analysts see another hike in June
Shoppers at a grocery store in downtown Rio de Janeiro on April 5, 2022. Although Brazil's central bank is months into an aggressive tightening campaign, the country's inflation rate topped 12% by mid-April.
Photographer: Maria Magdalena Arrellaga/BloombergThis article is for subscribers only.
Brazil’s central bank said much of the impact of its “intense and timely” cycle of interest rate hikes is still to come even as it left the door open to smaller borrowing cost increases amid a tough inflation outlook.
Policy makers wrote that a likely extension of tightening with a smaller increase in June was appropriate to bring inflation expectations to target, according to the minutes of the May 3-4 rate-setting meeting, when the board raised borrowing costs by a full percentage point.