Brazil holds rate, policy to remain stable for long period

    Brazil's central bank held its benchmark Selic rate steady at 7.25 percent, as widely expected, repeating that stable monetary conditions for "a prolonged period" was the most appropriate strategy to ensure that inflation returns to the bank's target.
    Banco Central do Brasil's policy committee, which at its last meeting in November froze rates for the first time after 10 consecutive rate cuts, said it kept rates unchanged in light of the balance of risks to inflation, which worsened in the short-term, while the recovery of domestic economic activity was less intense than expected and the international environment was still complex.
    The bank added in a statement that all members of the Copom committee voted to keep rates unchanged and there was no bias indicated.
     Brazil's headline inflation rate rose to 5.84 percent in December, the sixth month in a row of higher inflation and the highest rate in 2012. The central bank targets annual inflation of 4.5 percent, plus/minus 2 percentage points.
    Brazil's Gross Domestic Product rose 0.6 percent in the third quarter from the second, raising the annual growth rate to 0.9 percent, up from 0.5 percent in the second quarter

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