Brazil’s central bank left its benchmark interest rate unchanged on Wednesday at the highest level in nine years as the long battle with inflation continues with little relief in sight.
The bank’s monetary-policy committee left the benchmark Selic rate at 14.25%. The committee repeated its statement from its previous meeting, saying the Selic should stay at its current level for a “sufficiently prolonged period” for inflation to slow to the bank’s 4.5% target rate by the end of 2016.
It was the first time the committee left the Selic unchanged since September 2014. During last year’s presidential election campaign, the central bank briefly interrupted a tightening cycle that started in April 2013 from the Selic’s historic low of 7.25%.
The bank had telegraphed Wednesday’s decision at the previous meeting, when it announced a half-point increase.
Analysts are brushing off the idea of further tightening, especially after Brazil’s statistics agency said last week that gross domestic product contracted a seasonally adjusted 1.9% in the second quarter from the first.
Brazil Energy Insight 
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