Brazil’s Central Bank on Wednesday held interest rates at an all-time low but said it could gradually raise them if the outlook worsens, highlighting how the upcoming presidential vote is increasingly weighing on monetary policy.
Concern about the elections has already helped depress the Brazilian real BRBY to near record lows and could soon trigger the first interest rate rise in three years depending on the result.
The Central Bank’s statement pointed to upward and downward risks for inflation. While an underwhelming economic recovery could weigh on prices, disappointment over structural reforms could pressure the currency and accelerate inflation, particularly if the outlook for emerging markets deteriorates further.
Source: reuters.com/
