Economics
Brazil Signals End to Low-Rate Pledge Amid Faster Inflation
- Key rate kept at 2% in decision widely expected by economists
- End of monthly stipends and high unemployment cloud recovery
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Brazil’s central bank signaled it may be unable to fulfill its pledge to keep interest rates at a record low for long due to rising inflation expectations.
The bank, led by its President Roberto Campos Neto, on Wednesday held the benchmark Selic rate at 2% for the third straight meeting but said inflation expectations for the next two years are rising toward the target. That means conditions for keeping borrowing costs low may soon not be met, it added.