Brazil central bank raises benchmark interest rate to 15 pct

BRASILIA, June 18 (Xinhua) -- Brazil's Central Bank on Wednesday raised its benchmark Selic interest rate by 0.25 percentage points to 15 percent annually, marking the seventh consecutive increase since the monetary tightening cycle began in August.

In a statement, the bank's Monetary Policy Committee (Copom) indicated that this is likely the final hike before a pause to assess the impact of tightening measures already in place.

"The committee anticipates a pause in the interest rate hiking cycle to evaluate the accumulated effects of the monetary adjustment and determine whether maintaining the current rate for a sufficiently long period will ensure inflation converges toward the target," the statement said.

The decision, unanimous among Central Bank board members, brought the Selic rate to its highest level since July 2006.

Copom said that it continues to monitor how fiscal policy developments affect monetary policy and financial markets, adding that the economic environment remains marked by unanchored expectations, elevated inflation projections, resilient economic activity and labor market pressures.

The latest Focus survey forecasts inflation at 5.25 percent for 2025 and 4.50 percent for 2026, both well above the official inflation target of 3 percent, which allows a tolerance margin of 1.5 percentage points. ■