MNI BRIEF: Copom Hikes Rates By 25BP, Signals End Of Cycle

The Central Bank of Brazil (BCB) unanimously decided to hike its official Selic rate by 25 basis points to 15.00% Wednesday, while signaling this could be the last tightening move of the cycle.

"If the expected scenario materializes, the Committee foresees an interruption of the rate hiking cycle to examine its yet-to-be-seen cumulative impacts, and then evaluate whether the current interest rate level, assuming it stable for a very prolonged period, will be enough to ensure the convergence of inflation to the target," the statement said, offering no guidance for the next meeting in July.

It was the seventh consecutive increase, bringing the rate to its highest since May 2006.  Market participants were divided over this week’s decision, with most expecting the board to hold the official Selic rate at 14.75%, while some anticipated a 25-basis-point hike to 15%.

The board’s May decision, when the Monetary Policy Committee (Copom) raised rates by 50 basis points to 14.75%, also included no guidance for the next meeting. (See MNI WATCH: Market Divided Over BCB's Decision, Copom To Hold)