Economics
Brazil’s Central Bank Backs Higher Key Rate to Anchor Prices
- Central bankers raised interest rate 50bps to 13.25% last week
- Analysts expect another rate boost of 50bps or less in August
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Brazil’s central bank said an extension of its aggressive tightening cycle with another interest rate hike in August is needed to assure that high inflation forecasts will fall back around their target.
Policy makers discussed signaling a steady interest rate for a “sufficiently long” period but concluded another hike would still be needed, according to the minutes of their June 14-15 meeting, when the board raised borrowing costs to 13.25%. Another lift of 50 basis points or less to the benchmark Selic is appropriate to bring consumer price estimates near their goal, they wrote.