BRASILIA--Brazilian Central Bank on Wednesday kept its key interest rate unchanged for a third consecutive session waiver for the moment, taking a more aggressive stance to tame rising prices and cool the economy.
The monetary policy Committee acknowledged in a statement, it was a "less favourable Outlook" for inflation as at its previous meeting following its unanimous decision, but said it needed more time, to the impact of recent in Bank lending before further hold taken in check to investigate.
The unanimous decision to keep the benchmark Selic rate to 10.75% per year was the last under outgoing Central Bank President Henrique Meirelles. It came that fresh data showed the same day the IPCA consumer price inflation index jumped in November the Government target of 4.5%.
"The Committee understood it not appropriate to assess the monetary policy strategy in this session would be," said the Central Bank in a statement after the decision was announced.
Despite the recent inflation numbers not action announced expected, since the Central Bank had played down had inflation concerns in previous sessions, and it just most economists on prices to slow actions to bank lending.
Still, there is a growing expectation that Brazil will change as other major growing economies such as China, his attitude of growth a concentrated effort, to contain inflation. The arrival of a new central banker, Alexandre Tombini nominated by President Dilma Rousseff can Jan. 19 herald a change in policy at the next meeting.
The statement "only our view more (which) is the adjustment of the monetary policy stance to start," said Flavio Serrano, an economist at the Espírito Santo Investment Bank in a research note. Mr. Serrano said he expected that prices increase on Jan. 19 meeting by 0.50 percentage point, followed by two similar stature more hikes.
Late last week, the Central Bank sought to slow down, Bank lending by financial institutions of set aside an estimated 61 billion Brazilian reais ($36 billion) in bar. The move was seen as the removal of the last of the emergency measures in use during the global financial crisis in 2008 and 2009.
"They were measures which moved a rise in interest rates," said Jaime Alves, Economist at Brazil Febraban banking association. "Certainly those who expected a hike revised their forecasts after the announcement."
But there is considerable pressure from some quarters of the Government and industry for the Central Bank to maintain prices at the current level and Mrs Rousseff will lower your four-year term of Office starting Jan. 1. Opponents say higher prices to a further appreciation of the Brazilian real leads the already strong record levels compared with the dollar is located, increase exports of the country.
Higher prices drive the cost of the Brazil's large debt, wants to cut the new Government to 30% of GDP over the next four years, more than 40% at the moment.
Inflation expectations, still in the direction of more interest rate hikes ahead.
Economists have been consistently increase their forecasts for IPCA inflation in recent weeks, and now see it ends this year 5.78% until end of 2011 to 5.20% decreased. You can see the Selic rate end of 2011 to 12.25%.
-By Gerald Jeffris gerald.jeffris@dowjones.com
--Matthew Cowley in São Paulo contributed to this article.
Copyright (c) 2010 Dow Jones and company, Inc.
Write toGerald Jeffris at the gerald.jeffris@wsj.com
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