Brazil’s real led gains among emerging market currencies after the central bank delivered its most aggressive interest rate increase in nearly two decades and promised to bring back a restrictive monetary policy to tame above-target inflation.
The bank on Wednesday lifted the benchmark Selic by a full percentage point to 5.25%, as forecast by the vast majority of analysts surveyed by Bloomberg. Policy makers said they foresee another hike of the same magnitude next month, with the key rate eventually surpassing a neutral level that economists estimate at 6% to 7%.
By Maria Eloisa Capurro and Maria Elena Vizcaino via Bloomberg