Brazil’s central bank has lifted interest rates to a six-year high of 12.75% to restrain inflation.
Inflation in Brazil, Latin America’s largest economy, was at a 12-year high in February of 7.4%. The government’s target is 6.5%.
Brazil’s economy had been one of the world’s fastest growing, but looks to have stalled in 2014.
Economists are now predicting that the economy will contract by more than 0.5% this year.
In a statement, Brazil’s central bank said: “In assessing the macroeconomic scenario and the outlook for inflation, the Copom [the bank’s monetary policy committee] decided unanimously to raise the rate by 0.5 percentage points, to 12.75%.”
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.