29 Nov 2013
BCB lifts the Selic-rate to 10 %
It is the sixth increase in a row
The Brazilian central bank Banco Central do Brasil (BCB) continues tightening the monetary policy by increasing the benchmark Selic interest rate for the sixth time in a row. November 27th the BCB's interest-rate committee (COPOM) decided unanimously to raise the Selic-rate by 0.5 %-points to 10.0 % pa. Thereby, the Selic-rate has been raised by 2.75 %-points since April.
The decision was taken to "give continuation to the adjustment of the benchmark rate that began in the April 2013 meeting". The inflation rate in October was 5.84 % per annum, which is within the allowed tolerance band, and the increase is considered as part of bringing inflation closer to the target of 4.5 % pa +/- 2 %-points. The weakening of the Brazilian Real (BRL) accelerates inflation as imports become more expensive, thereby, potentially influencing the buying behavior of consumers.