BRAZIL CENTRAL BANK HIKES RATES

Brazil is forging ahead with its battle against inflation.

The country’s central bank hiked its benchmark interest rate by 50 basis points to 9 per cent on Wednesday evening, as it continues to tighten its monetary policy in the face of a weakening currency and high prices.

The central bank said in a statement:

The committee considers that this decision will continue to put inflation on a decline and assure that this trend will persist next year.

Brazilians staged mass protests earlier this summer to express their anger at soaring prices. The country’s currency, the real, has been rapidly depreciating against the dollar and investors have become wary that Latin America’s largest economy is stagnating.

Last week Brazil’s central bank launched a $60bn currency intervention program that promises investors one auction a day of currency swaps and a sale of repurchase contracts every Friday until the end of the year.

The real has weakened by about 20 per cent this year, as investors have shifted their portfolios to more stable currencies