Thursday, June 9, 2011

Central Bank of Brazil Raises Selic Rate 25bps to 12.25%

The Banco Central Do Brasil increased the Selic interest rate by 25 basis points to 12.25% from 12.00% previously.  According to a Bloomberg report, the Bank said: "Taking into account the balance of inflation risks, the still uncertain rhythm of the moderation of domestic activity, as well as the complexity of the international environment, the committee understands that, at the moment, the implementation of adjustment in monetary conditions for a sufficiently long period continues to be the most adequate strategy to ensure the convergence of inflation to the target in 2012".

Previously the Bank raised the Selic rate by 25 basis points to 12.00% in April this year.  Brazil last reported an annual inflation rate of 6.55%, compared to the official inflation target of 4.50%.  The Brazilian government is forecasting economic growth this year of 4.5-5%, compared to GDP growth of 7.5% during 2010.


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