Brazil slowed the pace of monetary tightening on Wednesday, signaling it may be near the end of a rate-hiking cycle that threatened to tip Latin America’s largest economy into a recession.
The central bank’s monetary policy committee voted unanimously to hike its Selic rate by 25 basis points, breaking a streak of six straight 50-basis-point hikes that took the benchmark rate to its highest level in over two years.
The bank kept its post-decision statement almost unchanged from the previous one, only removing a phrase added at its last meeting that said the decision had been taken “at this moment.”
While the bank did not close the door to raising rates again at its next meeting in April, many economists saw the decision as a signal that it may soon end one of the world’s most aggressive monetary tightening cycles.
“The central bank is signaling that it is ready to end the cycle,” said Andre Perfeito, chief economist at Gradual Investimentos in Sao Paulo. “The bank is being more cautious due to a sense that economic activity can slow down a lot in 2014.”
via CNBC 
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