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Brazil’s benchmark interest rate nears double digits

In line with forecasts, the Brazilian Central Bank’s Monetary Policy Committee hiked the Selic benchmark interest rate by 1.5 percentage points on Wednesday, continuing what has been the world’s steepest process of monetary tightening. The rate has jumped from 2 to 9.25 percent a year in 2021 — the highest in four years.

According to the committee’s minutes, the continued rises are the result of “deterioration in the risk balance” and high inflation. Consumer prices have risen 10.67 percent in the 12 months leading up to October, the highest level since the 2016 recession.Over the past month, markets’ median year-end inflation forecast went from 9.33 percent four weeks ago to 10.18 percent this week, according to the Focus Report — a weekly survey among top investment firms. Markets also expect interest rates to end 2022 at 11.25 percent.

Ana Ferraz

Ana Ferraz is a journalist specialized in global affairs and economics. She previously worked at the Italian News Agency ANSA and has been published by multiple Brazilian outlets.

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