Central Bank of Brazil Raises SELIC Rate to 8.5%

In its July 10 meeting, the Bank of Brazil's monetary policy committee raised its benchmark interest rate to 8.50 percent from 8 percent, maintaining the pace of monetary tightening to fight above-target inflation. The decision by the bank's committee was unanimous.
Nuno Fontes | nuno@tradingeconomics.com 7/11/2013 10:45:50 AM
The Committee argued that the decision to raise the rate by 50 basis points for the second successive meeting will contribute to set the inflation on a downward trend and ensure that it continues to decline throughout next year. 

With the interest rate standing at a 15-month high, the Board did not exclude further tax hikes to tame prices. The recent depreciation of the real poses a serious challenge for the central bank, which has pledged to bring inflation below the 5.84 percent mark recorded last year.

In June, the inflation rate hit a 20-month high of 6.7 percent, standing 0.2 percentage points above the upper limit of the Central Bank´s inflation target of 6.5 percent.

Central Bank of Brazil Raises SELIC Rate to 8.5%