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Brazil Central Bank raises benchmark interest rate to 8%
May 30, 2013, 9:34 am

[AP]

The Brazilian government set the inflation target for 2013 at 4.5 per cent [AP]

The Brazilian Central Bank’s Monetary Policy Committee (Copom) on Wednesday raised the country’s benchmark Selic interest rate from 7.5 to eight per cent.

It was the second hike this year following last month’s 0.25 percentage increase.

The committee’s unanimous decision was aimed at controlling the inflation rate, which was 2.5 per cent from January to April.

Brazil announced a cut for the 2013 federal budget by $13. 65 billion last week.

The Brazilian government set the inflation target for 2013 at 4.5 per cent.

“The Committee thinks the decision will contribute to lowering inflation and ensuring that the trend continues next year,” Copom said.

In 2012, Brazil’s inflation was 5.84 per cent, exceeding the 4.5 per cent target, but was below the limit of 6.5 per cent.

The Copom meets every six weeks to analyse the Selic rate.

Source: Agencies

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