Brazil Leaves Prime Interest Rate Unchanged Amid Inflation Concerns.
Brazil's central bank left the country's benchmark lending rate unchanged Wednesday, opting not to renew its rate cutting amid strong economic growth and inflation concerns. The bank's monetary policy committee, known as Copom, voted to hold the rate at 11.25 percent after a similar move to keep rates in check in October.
Prior to that, the central bank had a run of 26 months of rate cuts that slashed the benchmark rate by a combined 8.5 percentage points. "Evaluating the macroeconomic outlook and the prospective scenario for inflation, Copom unanimously decided to maintain the Selic rate at 11.25 percent a year, with no bias," the committee said in a statement.
The decision didn't surprise market analysts. "We expected this decision, given the conservative character the Central Bank always has," analyst Miguel Jose Ribeiro de Oliveira told the government news agency Agencia Brasil. "It's the end of the year, and they surely opted to wait for the New Year and see how things go."
Brazil's economy grew robustly in the second quarter, and some analysts have suggested the central bank wants to gauge the effects that past rate cuts have had on South America's largest economy.
But Oliveira said that indicators showed the rate had room to fall. "Inflation is within the target, the exchange rate is back at its normal level, so there's no concern of a wholesale price hike because of a currency devaluation," he said. Brazil's annual inflation rate is running at about 4 percent
Brazil Agrees to Help El Salvador Produce Biofuels
Biofuel powerhouse Brazil signed an agreement on Wednesday to help El Salvador produce biodiesel and improve production of ethanol in the small Central American nation.
Salvadoran President Tony Saca thanked Brazil and the U.S., the world's top producers of ethanol, for choosing El Salvador earlier this year as the site of a biofuels feasibility study. "Brazil and the United States ... responded to the call of El Salvador and chose our country to support the construction of ethanol plants," Saca said during a visit to Brasilia, the capital.
Brazil will help train Salvadoran technicians to produce biodiesel from mamona seeds, the government news agency Agencia Brasil said. Brazil also will help El Salvador modernize and improve production of sugar cane, one raw material used to make ethanol. In March, the United States and Brazil announced plans to bring Haiti, the Dominican Republic, St. Kitts and Nevis, and El Salvador into the biofuels program.
Brazil's central bank left the country's benchmark lending rate unchanged Wednesday, opting not to renew its rate cutting amid strong economic growth and inflation concerns. The bank's monetary policy committee, known as Copom, voted to hold the rate at 11.25 percent after a similar move to keep rates in check in October.
Prior to that, the central bank had a run of 26 months of rate cuts that slashed the benchmark rate by a combined 8.5 percentage points. "Evaluating the macroeconomic outlook and the prospective scenario for inflation, Copom unanimously decided to maintain the Selic rate at 11.25 percent a year, with no bias," the committee said in a statement.
The decision didn't surprise market analysts. "We expected this decision, given the conservative character the Central Bank always has," analyst Miguel Jose Ribeiro de Oliveira told the government news agency Agencia Brasil. "It's the end of the year, and they surely opted to wait for the New Year and see how things go."
Brazil's economy grew robustly in the second quarter, and some analysts have suggested the central bank wants to gauge the effects that past rate cuts have had on South America's largest economy.
But Oliveira said that indicators showed the rate had room to fall. "Inflation is within the target, the exchange rate is back at its normal level, so there's no concern of a wholesale price hike because of a currency devaluation," he said. Brazil's annual inflation rate is running at about 4 percent
Brazil Agrees to Help El Salvador Produce Biofuels
Biofuel powerhouse Brazil signed an agreement on Wednesday to help El Salvador produce biodiesel and improve production of ethanol in the small Central American nation.
Salvadoran President Tony Saca thanked Brazil and the U.S., the world's top producers of ethanol, for choosing El Salvador earlier this year as the site of a biofuels feasibility study. "Brazil and the United States ... responded to the call of El Salvador and chose our country to support the construction of ethanol plants," Saca said during a visit to Brasilia, the capital.
Brazil will help train Salvadoran technicians to produce biodiesel from mamona seeds, the government news agency Agencia Brasil said. Brazil also will help El Salvador modernize and improve production of sugar cane, one raw material used to make ethanol. In March, the United States and Brazil announced plans to bring Haiti, the Dominican Republic, St. Kitts and Nevis, and El Salvador into the biofuels program.
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