Brazilian central bank left the benchmark Selic rate unchanged at 14.25 percent at its October 2015 meeting, saying keeping rates at current level for a sufficiently prolonged period is necessary to bring inflation back to target. The decision came in line with market expectations.
The Selic rate was left on hold for the second straight meeting, following a rate-hike campaign initiated last year that brought borrowing cost up to a nine-year high, aiming to curb rising prices.
However, poliymakers are struggling with stubbornly high inflation and a deep recession. The economy contracted sharply by 1.9 percent on quarter and by 2.6 percent year-on-year in the April-June period, due to a slump in private consumption and investment. Although the inflation rate slowed to 9.49 percent in September, it accelerated to 9.77 percent in the month to mid-October, the highest in nearly 12 years. In addition, the Brazilian real already lost more than 40 percent to the USD so far this year.
10/21/2015 11:56:02 PM