Brazil raises interest rates amid ‘overheating’ fears

    Brazil’s Central bank on Wednesday raised its benchmark overnight rate by a half-point for a second straight meeting to cool inflation that is approaching the upper limit of the government’s target range.

    The bank’s policy committee, led by President Alexandre Tombini, voted unanimously, without a bias, to raise the Selic rate 50 basis points, or 0.5 percentage points to 11.75%. “Following the process of adjustment of monetary conditions, the monetary policy committee decided, unanimously, to raise the rate to 11.75% a year, without a bias,” policy makers said in the statement announcing their decision.

    Annual inflation in the 1.57 trillion US dollars economy has accelerated every month since August, prompting the bank to raise interest rates in January for the first time since July. The bank maintained the pace of rate increases as it counts on spending cuts and measures to slow credit growth to contain inflation running at a 26-month high, said Gustavo Rangel, chief Brazil economist for ING Financial Markets in New York. 

    Source: Merco Press