Brazil accelerates tightening cycle with 100bp rate hike

The Central Bank of Brazil
Photo: Central Bank of Brazil

The Central Bank of Brazil accelerated the tightening cycle it started in March in a bid to control rapidly rising inflation.

On August 4, the monetary policy committee increased the key Selic rate by 100 basis points to 5.25%, and signalled that another 100bp increase is likely in September. In 2021 so far, the central bank has increased rates by 325bp.

These efforts aim to rein in high and rising inflation. In June, inflation increased year on year by 8.4%, the highest level in five years

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