Brazil's central bank keeps interest rate unchanged at 13.75%, highest since early 2017

By Ovunc Kutlu

ANKARA (AA) - Brazil’s central bank kept its interest rate unchanged, it announced in a statement late Wednesday.

The bank’s monetary policy committee said the benchmark interest rate was kept unchanged at 13.75%, in line with market expectations.

Banco Central Do Brasil last made a rate hike of 50 basis points on Aug. 3, carrying the rate to 13.75%, highest since early 2017, and significantly up from the record low of 2% in March 2021.

"The inflationary environment remains under pressure, while the process of normalization of monetary policy in advanced economies continues towards contractionary rates," the bank said in a statement.

The central bank said the second quarter GDP came stronger than expected, but added that consumer inflation remains high despite the recent price declines in volatile items and impacts of tax measures.

Annual inflation in Brazil rose 9.6% from July 15 to Aug. 16, compared to the same month of last year.

Inflation is expected to average 5.8% for 2022 and 4.6% for 2023, according to the bank's monetary policy committee.