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Brazil’s Central Bank Has No Plans for Interest Rate Cuts

February 19, 2016 at 13:13 by Vladimir Vyun

Brazilian coins on 50-real billsAlexandre Tombini, Governor of the Central Bank of Brazil, said that the central bank has no plans to cut interest rates. While the news was positive for the Brazilian real, the currency had troubles rising against the US dollar.

The bank left its main interest rate at 14.25% last month. While reduction of borrowing costs might be helpful for spurring economic growth, inflation that stays above 10 percent does not make monetary policy easing an appealing prospect. As Tombini put it:

This inflation outlook does not allow for consideration of looser monetary policy

USD/BRL traded near the opening level of 4.0440 as of 13:10 GMT today after rising to the session maximum of 4.0582 and falling to the minimum of 4.0249.

If you have any questions, comments, or opinions regarding the Brazilian Real, feel free to post them using the commentary form below.

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