Brazil's central bank maintained its benchmark Selic rate at 11.0 percent, as widely expected, in light of "the evolution of the macroeconomic scenario and the outlook for inflation."
The Central Bank of Brazil, which ended its monetary policy tightening cycle in May after nine rate rises, added in a brief statement that the policy decision was unanimous and there was no bias regarding future policy moves indicated.
Unlike last month, the central bank omitted the phrase that the rate decision was "at this moment," a sign that it is likely to keep rates on hold for some time.
The central bank's decision comes against a backdrop of recession and high inflation.
Brazil's economy contracted for the second consecutive quarter in the second quarter of 2014, with Gross Domestic Product shrinking by a quarterly 0.6 percent after a 0.2 percent decline in the first quarter. Compared with last year, second quarter GDP contracted by 0.9 percent.
Brazil's headline inflation rate eased to 6.5 percent in July from 6.52 percent in June, but was still above the central bank's upper limit of 6.5 percent inflation. It targets inflation at a midpoint of 4.5 percent, with a lower limit of 2.5 percent.
The decision by the central bank's policy-making Copom committee was the last before the first round of the eagerly-anticipated presidential vote on Oct. 5.
President Dilma Rousseff's fiscal management has been criticized as lower revenue and increased spending has boosted the country's deficit and ratings agency Standard and Poor's earlier this year downgraded the country's sovereign rating for the first time in a decade.
Last week the government forecast economic growth of 3.0 percent next year and inflation of 5.0 percent while economists in the central bank's survey forecast 2015 growth of 1.2 percent and inflation of 6.28 percent.
For this year, economists expect growth of 0.79 percent, the lowest growth since 2001.
To help boost the economy while still keeping a lid on inflation, the central bank last month increased the amount of capital available to commercial banks by at least 25 billion reais by cutting the amount of capital that banks must keep on deposit with the central bank and the amount of capital that banks must have to back commercial loans.