• Categories
  • Archives

Bradesco Expects Key Brazil Interest Rate to Jump from 8.75% to 13%

Ana Cristina Costa from Bradesco According to Bradesco Asset Management, Brazil will boost interest rates to as high as 13% next year as policy makers become more “aggressive” to ensure the global economic recovery doesn’t fuel faster inflation.

The central bank will raise the benchmark lending rate, the Selic, “in two stages” from a record low of 8.75%, said Ana Cristina da Costa, chief economist at the asset management unit of Brazil’s second-largest non-state bank.

Central bankers will start increasing the rate in March and take it to 10.25% by July, Costa said. They will then pause until 2011, when they will increase it at least another 2.25 percentage points and as much as 2.75 points, she said.

Costa’s prediction puts her at odds with the consensus forecast among economists. They estimate the Central Bank will cut the rate to 10.75% in 2011 after increasing it to 11% this year, according to the median forecast in a central bank survey of about 100 economists taken last week.

Costa said she expects the Central bank to raise rates slowly this year because international companies will keep flooding the country with imports, boosting competition for market share with local companies and keeping prices down.

As the global recovery picks up in 2011, foreign companies will have less excess capacity, prompting them to ship fewer goods to Brazil, she said.

Annual inflation in Brazil quickened to 4.3% in December from 4.2% in November, a government report showed Wednesday. The Brazilian government targets annual inflation of 4.5%.



  • Show Comments (0)

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.


You May Also Like

Genoíno’s Path from Guerrilla to Socialist Lite in Brazil’s Congress

José Genoíno’s life covers the trajectory of the Brazilian left over the last half ...

Brazil’s Fingerprinting: Good to Catch Sex Tourists

Many U.S. citizens visit foreign lands to engage in illegal activity that would be ...

With Army Help Rio Takes Over “Heart of the Evil” in Clean-Up Effort for 2016 Olympics

Rio’s Public Security Secretary José Mariano Beltrame described the police raid on the Alemão ...

Brazil Intent on Ending Indians’ Malnutrition

Brazil’s National Health Foundation (Funasa) and the Oswaldo Cruz Institute Foundation (Fiocruz) signed a ...

Prostitution: Brazil Justice Sees No Crime in Occasional Sex with Minor

Brazil's Superior Justice Tribunal, an appellate court, in Mato Grosso do Sul state, after ...

Brazilian circus's  star Claudia, 3 years old

Brazil: Something Must Be Wrong When the Headliner Female Is Only 3

The catcalls began the instant the dancer turned around. Dressed in black knee high ...

Brazil Favorite to Win World Cup Followed by Argentina

With the draw for the 2006 World Cup taking place today in Leipzig, Germany, ...

With Public or Private Funds Brazil Is in a Rush to Fix its Roads

Brazil’s government hopes to award the concession for the BR-163 highway, which connects Cuiabá ...

After Cuts Brazil’s Agrarian Reform Gets More Money

Brazil’s Ministry of Agrarian Development (MDA) will receive another US$ 154 million (400 million ...

Brazil: Sí£o Paulo Industry Cuts 45,000 Jobs

The level of industrial employment in São Paulo, Brazil, declined 2.16% in December, 2005, ...