MNI BRIEF: BCB Keeps Rates At 15% Again, Higher For Longer

The Central Bank of Brazil (BCB) unanimously decided Wednesday to hold its official Selic rate at 15.00%, removing from its forward guidance the reference to a "continuation of the interruption" of the hiking cycle, while reinforcing that it will keep rates elevated for a "very prolonged period."

"The current scenario, marked by heightened uncertainty, requires a cautious stance in monetary policy. The Committee will remain vigilant, evaluating whether maintaining the interest rate at its current level for a very prolonged period will be enough to ensure the convergence of inflation to the target," the statement stressed.

The previous document stated "if the expected scenario materializes, the Committee foresees a continuation of the interruption of the rate hiking cycle to examine its yet-to-be-seen cumulative impacts, and then evaluate whether the current interest rate level."

The Monetary Policy Committee (Copom) ended its tightening cycle in July after seven consecutive increases, bringing the rate to its highest level since 2006. The decision was in line with market expectations. (See MNI BCB WATCH: Copom Expected To Hold At 15%, Eyes On Next Cut)