Brazilian Central Bank keeps interest rates unchanged

The Central Bank of Brazil (BCB) did not change the benchmark interest rate as expected. According to the statement made by BCB, the benchmark Selic interest rate remained at 13.75 percent. Market expectations were that there would be no change in interest rates. BCB paused the interest rate hikes it had made by 1175 basis points in 12 consecutive meetings in September. BCB did not change the interest rate in its last two meetings. The Board stated that it would assess whether the Selic interest rate protection strategy would be sufficient to ensure inflation convergence for a sufficiently long period and that it would remain vigilant. The Board reiterated that future monetary policy steps could be adjusted and that it would not hesitate to continue the tightening cycle if the fight against inflation did not progress as expected. BCB's inflation target is +-1.5 points at 4.25 percent. In Brazil, where inflation peaked at 12.13 percent in April, price increases first slowed down and then turned negative, falling to 6.47 percent annually.