ZCZC
BCN-10
BRAZIL-INFLATION-RATE
Brazil’s central bank maintains record low 6.5% interest rate
BRASILIA, Sept 20, 2018 (BSS/AFP) – Brazil’s Central Bank maintained its
key interest rate at the historic low of 6.5 percent on Wednesday, despite
uncertainty related to next month’s presidential elections and a weakening of
the currency against the dollar.
Following 12 successive cuts, the key interest rate — the main tool in
the fight against inflation — has been stable since March.
“The evolution of the situation encourages the maintenance of the rate at
its current level,” said the Central Bank in a statement.
Most analysts don’t expect the rate to be increased again until 2019, when
it should be raised to 8.0 percent.
Inflation accelerated unexpectedly in June, up 1.26 percent on the
previous month, due in part to a truckers’ strike that paralyzed the country
at the end of May.
It slowed in July (+0.33) before a surprise drop of 0.09 percent in
August, leaving inflation at 4.09 percent for the year, still within the
upper limit of the government’s target inflation range: 3 to 4.5 percent.
Inflation remains under control despite the real’s struggles, where it hit
a record low of almost 4.2 to the dollar last week.
It has lost more than 20 percent since the start of the year as Brazil’s
at times surreal presidential election campaign creates nervousness in the
markets.
Current opinion polls have right-wing ex-army captain and confirmed fan of
torture by the 1964-85 military dictatorship, Jair Bolsonaro, and last-minute
leftist Workers’ Party (PT) substitute candidate Fernando Haddad in the lead.
Haddad was only put forward by the PT a week ago after jailed former
president Luiz Inacio Lula da Silva finally gave up on his attempts to stand
in the election, for which he is barred due to Brazil’s “clean-slate” law.
Bolsonaro, meanwhile, is convalescing in hospital after he was stabbed by
a leftwing activist while on the campaign trail earlier this month.
BSS/AFP/HR/1000