LatinNews Daily - 05 May 2022

In brief: Another interest rate hike in Brazil

* Brazil’s central bank (BCB) has announced its tenth consecutive hike to the basic interest rate, raising it by 100 basis points to 12.75%. The interest rate is now at its highest level since January 2017, when it stood at 13.0%. The rate hike comes as the latest figures from the national statistics institute (Ibge) put annual inflation at 11.30% in March. A BCB statement noted that the inflationary situation is “deteriorating,” with “inflationary pressures resulting from the pandemic intensifying due to supply problems stemming from a new wave of Covid-19 in China and the war in Ukraine.” The BCB noted that inflation forecasts in its latest Focus bulletin, a weekly survey of market analysts, are for annual inflation in 2022 to amount to 7.9%, - significantly exceeding the BCB’s target of 3.5% +/-1.5.

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