Statement by 1.5 points, it reached 7.75%. The aim is to curb the runaway inflation which reduced the income of Brazilians more modest.
Le Monde with AFP
The Central Bank of Brazil noted, Wednesday 27 October, its key rate to 7.75%, up 1.5 points, the largest since 2002 to try to curb runaway inflation. This is the sixth consecutive increase in this rate, which was at its historic low of 2% earlier this year.
The decision was taken unanimously by the Monetary Board of the Central Bank (Copom), which announced in a statement that it could undertake a further rise “to the same extent” at its next meeting, early December.
If this trend continues, the policy rate will end the year at 9.25%, while analysts expected 3% early in the year. At its last two meetings, the Copom had raised the rate of one percentage point.
Main tool against inflation, the Selic rate has already returned to its level of the late 2017, when it was 7.5%. The increase of 1.5 point this Wednesday is a particularly drastic measure, the most since December 2002, when the policy rate was raised from 3% just before the coming to power of leftist President Luiz Inacio Lula da . Silva
A double-digit inflation
It is justified by a sharp rise in inflation, which reached 10.25% in September over the last 12 months in the largest economy in Latin America and gnaws income families, especially the poorest.
This is the first time since 2016 that Brazil revives a double-digit inflation, particularly because of the sharp increase in prices of food and fuel.
According to experts, this new increase in the policy rate is also due to the decision of the Brazilian Jair Bolsonaro president 20% increase allocations for the poor.
This controversial proposal has yet to be submitted to Parliament for approval. According to experts, it would be virtually impossible to reach this amount not exceeding the maximum budget expenditure.
The popularity of the President of the extreme right, which seeks re-election next year is the lowest since he took office in 2019, in a country with more than 13.7 million unemployed.
On Wednesday morning, the IBGE statistics institute released the latest employment data, with a fourth consecutive decline in the unemployment rate to 13.2%, but with a large proportion of informal employment and wages more lower for assets