Central Banks
Brazil Real Jumps to Eight-Month High on Hawkish Rate Signals
- Central bank signaled rates steady at 13.75% for longer
- The real rose past 5 per dollar for the first time since June
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Brazil’s real strengthened to the highest since June after central bankers kept interest rates on hold and expressed concern about rising inflation expectations, fueled by tensions with President Luiz Inacio Lula da Silva’s new government.
Policymakers held the benchmark Selic at 13.75% for the fourth straight meeting late on Wednesday, as expected. But the statement was widely seen as hawkish, with board members writing they will assess if keeping rates steady “for a longer period” than previously expected will slow inflation to target.