Brazil Central Bank Hikes Key Interest Rate To 11.25%

Brazil’s central bank raised its key interest rate by 0.5 percentage points to 11.25% on Wednesday, marking the second consecutive increase.

This move contrasts with the U.S. and EU, where central banks have started cutting rates.

Brazil’s inflation in September was 4.42%, above the 3% target, driven by factors like a drought affecting food and electricity prices.

The market predicts inflation will be 4.59% in 2024.

Other contributing factors include a high U.S. dollar, a tight labor market, and government budget policies.

Despite economic growth of 3.3% in Q2 and a drop in unemployment, President Lula has criticized rate hikes for stifling growth, Barron’s has reported.

read more: https://www.barrons.com/news/brazil-central-bank-hikes-key-interest-rate-to-11-25-d758be69

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