By CentralBankNews.info
Brazil’s central bank raised its benchmark Selic rate by another 25 basis points to 11.0 percent, its ninth rate rise since April 2013 but said its next move would depend on inflation and growth, signaling that it could be nearing the end of its monetary tightening campaign.
The Central Bank of Brazil, which has now raised its rate by a total of 375 basis points since last April and by 100 points this year, said its monetary policy committee, known as Copom, had decided to raise the rate unanimously and without bias.
“The Committee will monitor the evolution of the macroeconomic scenario until its next meeting to define the next steps in its monetary policy strategy,” the central bank said.
The guidance is more neutral than in February and January when the bank said the rate rises were a continuation of the adjustment of the basic interest rate process that was started in April last year.
The rate rise was widely expected after headline inflation rose to 5.68 percent in February after dropping to 5.59 percent in January and the central bank in its quarterly inflation report last month raised its 2104 forecast to 6.1 percent from a previous projection of 5.6 percent as severe drought in Southern Brazil has affected the harvest and raised food prices.
The central bank, which targets inflation at a midpoint of 4.5 percent, plus/minus 2 percentage points, also raised its 2015 forecast to 5.5 percent from 5.4 percent. Inflation has exceeded the bank’s midpoint target in the last four years.
