Political Risk Latin America Blog @PolRiskLatam

Brazil puts foot on the brake

Posted in News and Articles, Political Risk by politicalrisklatam on March 3, 2011

by Joe Leahy for Financial Times – Beyond Brics, March 3rd, 2011.

Brazil’s central bank could hardly have been more non-committal. Raising the benchmark Selic rate by the expected 50 basis points on Wednesday night, the bank said in a one line statement only that it was carrying out the action, “unanimously” and “without bias”.

This comes after the economy has been sending out some mixed signals. After dipping late last year, Brazil’s industrial output surprised on the upside in January with a 0.2 per cent gain against December compared with expectations among economists of a 0.3 per cent fall.

On the other side, Brazil’s unemployment rate rose to 6.1 per cent in January from a record low of 5.3 per cent in December.

Inflation continues to rise, however. It surged 6.08 per cent in the 12 months through to mid-February, exceeding the central bank’s target of 4.5 per cent, plus or minus 2 percentage points. (continue reading… )

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