BRAZIL’S CENTRAL BANK INCREASES INTEREST RATE BY 25 BASIS POINTS TO 10.75 PCT

ISTANBUL, Sept 19 (Bernama-Anadolu) -- On Wednesday, Brazil’s central bank announced a 25-basis-point hike in its benchmark interest rate, bringing it to 10.75 per cent, reported Anadolu Agency.

"The global environment remains challenging due to the inflection point of the economic cycle in the United States, which poses questions about the pace of economic deceleration, disinflation and, consequently, about the Fed's monetary policy stance," the bank’s Monetary Policy Committee (Copom) said in a statement.

The interest rate decision comes despite Brazil's consumer inflation slowing down in August.

Consumer prices annually increased 4.24 per cent in August, slowing the pace from a 4.5 per cent year-on-year gain recorded in July, according to the Brazilian Institute of Geography and Statistics (IBGE).

On a monthly basis, the consumer price index decreased 0.02 per cent in August, after a 0.38 per cent month-on-month increase in July, IBGE figures showed.

Copom, however, said that headline inflation as well as various measures of underlying inflation have been above the inflation target in recent months.

"The Committee judges that the risks to its inflation scenarios are tilted to the upside," said the statement.

Banco Central do Brasil had last implemented a rate hike of 50 basis points in August 2022, bringing the rate to 13.75 per cent, the highest since early 2017 and up sharply from a record low of 2 per cent in March 2021.

It lowered the interest rate by 50 basis points to 13.25 per cent in August 2023, its first rate cut in three years.

The central bank lowered its benchmark interest rate on May 8 by 25 basis points to 10.50 per cent.

--BERNAMA-ANADOLU