Brazil raises Selic rate 50 bps to 10%, no bias indicated

    Brazil's central bank raised its benchmark Selic rate by 50 basis points to 10.0 percent, as widely expected, and did not issue any guidance for the future direction of monetary policy.
    The Central Bank of Brazil has now raised rates six times in a row by a total of 275 basis points this year to contain inflation.
    "Continuing the adjustment of the basic interest rate process, which began in April 2013, the Committee decided unanimously to raise the Selic rate to 10.00% pa, without bias," the central bank's policy committee, known as Copom, said.
    Copom's statement omitted any reference to the policy decision contributing to reducing inflation and ensuring that this trend would persist into next year. In recent months this sentence has accompanied the statements announcing the rate rises.
    Economists had expected the central bank to raise its rate today and continue to raise rates next year to 10.50 percent, according to the central bank's survey of 100 analysts published this week. The next meeting by Copom is in January.
    Brazil's inflation rate eased slightly to 5.84 percent in October from 5.86 percent in September, continuing its decline since hitting a year-high of 6.7 percent in June. The central bank targets annual inflation of 4.5 percent, plus/minus 2 percentage points.
    Brazil's Gross Domestic Product expanded by 1.5 percent in the second quarter from the first for annual growth of 3.3 percent, up from 1.9 percent, and the fourth quarter of accelerating growth.  
    The central bank has forecast economic growth this year of 2.5 percent, up from 0.9 percent in 2012.
   
    www.CentralBankNews.info