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The bank increased its Selic (short-term interest) rate by 50 basis points to 9.5 per cent.
Central bank President Alexandre Antonio Tombini backed Wednesday’s decision and there are strong indications the bank could maintain the current pace of rate rises at its next meeting in November.
“Giving continuation to the adjustment of the benchmark interest rate, the Copom decided unanimously to raise the Selic rate to 9.50 per cent a year, without bias,” said a central bank statement.
“The committee considers that this decision will contribute to put inflation on a decline and assure that this trend will persist next year,” it added.
According to figures released by government statistics agency IBGE on Wednesday, Brazil’s benchmark IPCA consumer price index rose 5.86 per cent in the 12 months through September.
Brazilian Finance Minister Guido Mantega said Wednesday that the administration is closely monitoring the situation.
“We’re going to remain alert to prevent that inflation resumes rising to harm Brazilian consumers,” said Mantega in Brasilia.