BRASÍLIA: Brazil’s central bank is widely expected to hold interest rates at near-decade highs for the ninth straight time on Wednesday, keeping up a battle against inflation that has barely eased despite a crippling recession. All of the 39 economists polled by Reuters last week said the bank’s monetary policy committee, known as Copom, would maintain its benchmark Selic rate at 14.25 percent for Latin America’s largest economy.
Although Brazil’s borrowing costs are among the highest for a major economy, inflation has remained stuck at around 9 percent as a surge in food prices offset a sharp drop in consumer and business demand. Stubborn inflation has puzzled economists and raised worries among policymakers that it could threaten an economy they believe could be near a turning point as a political crisis eases and confidence returns in the former emerging-market star.
The country’s gross domestic product probably fell in the second quarter but is likely to show signs the recession may be near its end, a Reuters poll of economists showed last week. The official GDP result is scheduled for release early on Wednesday.
