Brazil raises annual basic interest rate to 13.75 percent
11/9/2008 17:44
Brazil's Monetary Policy Committee (Copom) announced late yesterday its
decision to increase the country's annual basic interest rate (Selic) from 13 to
13.75 percent.
On the same day, the Brazilian Institute of Geography and
Statistics (IBGE) announced that Brazil's GDP grew by 6 percent in the first
half of 2008.
It was the fourth consecutive interest rise this year. In April
and June, Copom raised the interest rate by 0.5 percent twice, and in July by
0.75 percent.
For the first time since July 2007, the committee's decision
was not unanimous -- three of the eight members voted for a 0.5 percent increase
of the interest rate.
The Brazilian government was trying to control
consumption and inflation rate by raising interest rate.
The 0.75 percent
rise was considered exaggerated by many as Brazil's inflation rate fell to 0.28
percent in August, the second consecutive drop in the year.
The country's
Central Bank set an inflation target of 4.5 percent for 2008, with a tolerance
of 2 percentage points, which means the yearly rate should not exceed 6.5
percent.
The accumulated inflation rate for 2008 reached 4.48 percent in
August.
COPOM will hold meetings in October and December. The country's Selic
is estimated to reach 14.75 percent by the end of 2008.
Xinhua
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