LatinNews Daily - 17 March 2022

In brief: Brazil’s central bank raises interest rates, cites war

* The monetary policy committee (Copom) in Brazil’s central bank (BCB) has unanimously decided to raise the benchmark interest rate, the Selic, by one percentage point to 11.75%. This is the Copom’s ninth consecutive rate hike, and raises the Selic to the highest point in five years. The Copom cited the “substantial deterioration” of the external scenario with the war between Russia and Ukraine, with related concerns around higher inflation. The Copom now sees inflation closing the year at 7.1% in its reference scenario (up from 5.4% previously), with the Selic at 12.75% at year’s end. The BCB had been expected to start easing its tight monetary policy in the second half of this year, but the war has now pushed the prospect of rates starting to decrease back to 2023.

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