MNI BRIEF: Very Restrictive Policy For Longer - BCB Minutes

The Central Bank of Brazil will keep interest rates at a "significantly contractionary" level for a "very prolonged period" amid unanchored expectations, minutes from its last meeting showed Tuesday.

"Following a swift and firm interest rate hike cycle, the Committee anticipates, as its monetary policy strategy, continuity of the interruption of the rate hiking cycle to observe the effects of the cycle already implemented," the document stated.

"It was emphasized that, once the appropriate interest rate is determined, it should remain at a significantly contractionary level for a very prolonged period due to deanchored expectations," the statement added.

The BCB recently decided to hold its official Selic rate at 15.00%, saying that the "interruption of the rate hiking cycle" will continue in further meetings to "examine its yet-to-be-seen cumulative impacts." (See MNI WATCH: BCB Holding For Now, Curbing Early Easing Bets)