End of preview - This article contains approximately 1802 words.
Subscribers: Log in now to read the full article
Not a Subscriber?
Choose from one of the following options
Back
Economy & Business - January 2011 (ISSN 1741-7430)
Raising rates
On 19 January Brazil's central bank did what economists and the
financial markets wanted, and raised the base interest rate (known as the Selic)
by half a percentage point to 11.25% a year. Businessmen were unhappy. Their
complaints are based on three arguments. The first is that Brazil already has
the highest real (inflation-adjusted) interest rates in the world, so raising
rates further is going to have little effect. The second argument is that all
higher rates will do is push the Real to even more overvalued heights against
the dollar and thus start to price Brazilian manufactured goods out of not only
export markets but also their own domestic market. Their third argument is that
the increase was not needed because inflationary expectations are subsiding in
Brazil.
- Can the region live with strong currencies?
- OK, but no more
- Raising rates
- ARGENTINA A novel idea for dealing with inflation
- URUGUAY: Booming
- CHILE: Central bank holds rates as economy moves up a gear
- PARAGUAY: Focusing on inflation
- BOLIVIA: Debt rises
- COLOMBIA: Focusing on the domestic economy
- ECUADOR: Bread prices rise
- PERU: Tightening monetary policy
- VENEZUELA: Looking up after a horrible 2010
- COSTA RICA: Government announces fiscal adjustment
- CUBA: Talking the talk
- DOMINICAN REPUBLIC: Inflation comes to 6.2% in 2010
- EL SALVADOR: Remittances up 2.2% in 2010
- GUATEMALA: Central bank expects at least 2.6% GDP growth in 2011
- HONDURAS: Tough year ahead
- NICARAGUA: Record exports in 2010
- PANAMA: Martinelli forecasts strong GDP growth
- AGRIBUSINESS: Coffee joins the commodities party
- BANANAS: Ecuador changes price
- THE REGION'S CAR INDUSTRY: Booming
- China and Latin America: Bigger than the World Bank