The Central Bank of Brazil, which last raised its rate in May after nine rate rises, added that six of the members of its policy committee, known as Copom, had voted for the increase - including Chairman Alexandre Tombini - while three had voted to maintain rates.
Economists had widely expected the central bank to keep rates steady until President Dilma Rousseff had time to announce her new key appointments following her narrow re-election.
But the central bank has also been under pressure to raise rates soon to slow consumption that has helped pushed inflation, along with the declining real currency, to 6.75 percent in September from 6.51 percent in August, above the central bank's upper limit of its 2.5 to 6.5 percent target.
The Central Bank of Brazil issued the following statement:
"The Copom decided to increase the Selic rate to 11.25 percent, without bias, with 5 votes for the monetary policy action and 3 votes in favor of maintaining the Selic rate at 11.00 percent.
For the Committee, since its last meeting, among other factors, the intensification of relative prices´ adjustments in the economy has made the balance of risks for inflation less favorable. In light of that, the Committee considered opportune to adjust the monetary conditions in order to guarantee, at a lower cost, the prevalence of a more benign scenario for inflation in 2015 and 2016.
The following members of the Committee voted for this decision: Alexandre Antonio Tombini (Governor), Aldo Luiz Mendes, Anthero de Moraes Meirelles, Carlos Hamilton Vasconcelos Araújo and Sidnei Corrêa Marques. The following members of the Committee voted for the maintenance of the Selic rate at 11.00 percent p.a.: Altamir Lopes, Luiz Awazu Pereira da Silva and Luiz Edson Feltrim.
The October Copom Minutes will be released in Portuguese next Thursday, November 6."
www.CentralBankNews.info
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