Brazil Central Bank Raises Rate to 9%

Brazil has raised its benchmark interest rate to 9% from 8.5% in a further attempt to rein in inflation.

The central bank’s monetary policy committee, the Copom, voted unanimously for a third straight half percentage point rate rise.

The Copom left the door open for more hikes by reiterating that the latest rise is part of an ongoing rate-adjustment process.

A fall in the value of Brazilian real has stoked inflation, currently 6.15%.

The currency’s fall has been blamed on an outflow of capital triggered by expectation that the US Fed will end its stimulus policy, leading to a stronger dollar.

The real has lost 20% of its value against the dollar since the start of the year.

Other emerging nations, including in southeast Asia, have suffered similar currency problems.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza
Alfonso Esparza

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