Brazil: Central Bank makes fifth-consecutive hike to SELIC rate
October 9, 2013
At its 9 October meeting, the Central Bank's Monetary Policy Committee (COPOM, Comite de Politica Monetaria) decided to raise the benchmark SELIC interest rate by 50 basis points to 9.50% in a unanimous vote that was in line with market expectations. The decision comes amid continued concerns over inflationary pressures and a weakening currency. The move follows an equivalent rate hike in the previous meeting which took place in late August.
In the Bank's brief accompanying statement, which was unchanged from the previous month, policymakers stated that the policy rate increase should help steer inflation on a downward path and affirmed that this trend will continue next year.
A majority of LatinFocus Consensus Forecast participants see the SELIC rate ending this year at 10.00%, with an average forecast of 9.71%. Panelists see the SELIC rate ending 2014 at an average rate of 9.90%.
Author: Carl Kelly, Economist