The interest rate has been raised for the sixth consecutive time, though this increase is milder after three consecutive hikes of one percentage point each.
The decision to raise the base interest rate, made unanimously, was anticipated by the market as it had been forecasted by the Central Bank in March.
The bank’s statement indicated that “the external environment is adverse and particularly uncertain due to the economic and political situation in the United States, especially concerning its trade policy and its effects.”
This is compounded by Brazil’s fiscal situation, with the institution highlighting that both issues have been placing pressure on prices and the market and worsening expectations.
In March, the price index reached 5.48% on an annual basis, driven by food products and exceeding the upper limit of the target, which is set at 4.5%.
For this year, the issuer projects that inflation will end at 4.8%, lower than the March estimate of 5.7% and similar to the price index with which Brazil concluded 2024, at 4.83%.
