[Asia Economy Reporter Park Byung-hee] Bloomberg reported that the Central Bank of Brazil raised the benchmark interest rate from 2.75% per annum to 3.50% on the 5th (local time).
The Central Bank of Brazil's Monetary Policy Committee unanimously decided to raise the benchmark interest rate. Following the rate hike in March, which was the first in six years, the Central Bank raised the rate again after two months. In the March hike, the rate was increased by 0.75 percentage points from 2% to 2.75%.
The reason the Central Bank of Brazil raised the benchmark interest rate by 1.5 percentage points within two months is due to the rapid surge in inflation.
The Central Bank of Brazil has set an annual inflation target of 3.75%, with an allowable range of ±1.5 percentage points. However, Brazil's consumer price inflation rate has already exceeded 6%, and it is expected to approach 8% this month.
The Central Bank of Brazil stated that it may raise interest rates further at the next monetary policy meeting. The Central Bank usually holds regular Monetary Policy Committee meetings every 45 days.
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