Brazil Base Interest Rate at 6.25%... Highest in 26 Months

[Asia Economy Reporter Cho Hyun-ui] The Central Bank of Brazil raised the benchmark interest rate to 6.25% on the 22nd (local time), marking the highest level since July 2009.

According to Bloomberg on the 22nd (local time), the Central Bank of Brazil increased the benchmark interest rate by 1 percentage point from 5.25% to 6.25%.

Brazil has raised the benchmark interest rate by 4.25 percentage points since March. After raising it from 2.00% to 2.75% at that time, this marks the fifth consecutive increase.

The benchmark interest rate of 6.25% is the highest level since the end of July 2019 (6.50%). This move aims to curb the pressure of rapid inflation.

Brazil's cumulative inflation rate from January to August this year was 5.67%, and the cumulative inflation rate over the past 12 months up to August was 9.68%.

The authorities set the inflation target for this year at 3.75%, with an allowable range of ±1.5 percentage points. However, according to the Central Bank's economic outlook report, the inflation rate at the end of this year is expected to exceed 8% by a wide margin.