Central Bank of Brazil raises interest rate by 150 basis points for fear of fiscal deterioration

The Central Bank of Brazil it raised the benchmark interest rate by 150 basis points on Wednesday, deepening its fight against deteriorating inflation prospects, after the government decided to relax the constitutional limit on public spending.

The committee that sets the bank’s monetary policy, known as Copom, unanimously decided to raise the benchmark Selic rate to 7.75 percent.

Most of the 36 economists polled by Reuters had forecast a third consecutive increase of one percentage point, but recent concern about the fiscal issue last week led five to expect a rise of 125 basis points and three to expect a rise of 150 basis points. .

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