Brazil's Central Bank Raises Selic Rate To 8%
The Monetary Policy Committee (Copom) of The Central Bank of Brazil unanimously decided on May 29th to increase the benchmark Selic rate by 50pp to 8 percent, stepping up the pace of monetary tightening in an effort to curb the inflationary trend.
The decision came only a few hours after a sluggish growth figures were released. The government package stimulus, such as tax cuts and energy subsidies failed to spark growth but driven inflation to the upper limit of the Central Bank´s target range.
In the first four months of 2013, the inflation rate has been very close to the upper limit of the Central Bank´s official target of 6.5 percent.
As consumer prices continue to rise, the Central Bank changed its policy stance towards a more hawkish tone, suggesting that policymakers could continue to deliver aggressive rate hikes to counteract a surge in prices.
6/2/2013 4:08:23 PM