Brazilian Central Bank keeps interest rates unchanged

The benchmark Selic interest rate remained at 13.75 percent, the Brazilian Central Bank said. The Brazilian Central Bank (BCB) left its benchmark interest rate unchanged, as expected. The bank kept the Selic at 13.75 percent for its fifth consecutive meeting late Wednesday. In a statement, policymakers mostly maintained the tone of their previous communications, including warning of additional rate hikes if price increases do not slow as expected. They also noted that inflation expectations have shown “additional deterioration,” especially in long-term forecasts. On the one hand, the recent reintroduction of fuel taxes has reduced the uncertainty of fiscal outcomes in the short term, the statement said, while on the other hand, the current scenario, in which financial markets are dominated by high volatility and long-term inflation expectations are detached from targets, underlined the need for greater caution when formulating monetary policy.