Brazil CB Holds Rate Steady

For the second consecutive time, the Central Bank of Brazil did not change the economy’s benchmark interest rate. The Monetary Policy Committee unanimously decided to hold the Selic rate at 6.5% a year on June 20. The decision had been expected by analysts, IndraStra Global reported. Latin America’s biggest economy continues to emerge slowly from its worst recession in history, which extended through 2015 and 2016. The central bank has mounted a sustained campaign to breathe life into the moribund economy, slashing the Selic all the way from 14.25% in October 2016, a time when the country faced not only negative economic growth but high inflation. In May 2018, the central bank interrupted a series of 12 consecutive cuts to the key Selic rate, citing volatility in the markets and investor frustration over the government’s inability to push through pension reform and other long-delayed austerity measures. But in May 2018, an extended truckers’ strike brought the economy to its knees, adding to a rising sense of political uncertainty ahead of general elections in October.