The Brazilian Central Bank published today the minutes from last week’s Monetary Policy Committee meeting, which raised interest rates by one percentage point to 12.75 percent. Citing a “global environment [that] has deteriorated further” and intensified inflationary pressures, the bank said consumer prices will continue to climb but kept its year-end inflation forecast below those of market analysts.
The Central Bank expects the IPCA consumer price index to close the year at 7.3 percent, while top-rated firms surveyed by its weekly Focus Report have pushed the median forecast to 7.9 percent.
“The committee began its debate on the risks surrounding its projections by discussing some of the possible reasons for the difference between the baseline scenario projections and analyst projections. Some members emphasized that the high current inflation has contaminated longer-term expectations beyond what was expected,” the Copom minutes read.