Brazil Raises Interest Rates by 100 Basis Points, Signals Smaller Hikes Ahead

Brazil’s central bank raised interest rates by 100 basis points to 14.25%, the highest since 2016. This marks the third consecutive hike, with a potential for smaller increases in the future as economic signs are monitored.

On Wednesday, Brazil’s central bank raised its benchmark interest rate by 100 basis points for the third consecutive time, adhering to its previous guidance. This action was taken by the bank’s rate-setting committee, known as Copom, which increased the Selic rate to 14.25%, a level not reached since 2016. Furthermore, the bank indicated that it may implement a smaller rate hike at its upcoming policy meeting while closely monitoring indicators of an economic slowdown.

In summary, Brazil’s central bank continues to raise interest rates amidst ongoing economic assessment. The recent increase to 14.25% is an effort to manage economic conditions, with forecasts suggesting future hikes may be more moderate as the central bank assesses economic indicators.

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