Brazil's central bank today raised its target interest rate by 0.25 of a percentage point to 15pc, the highest level since July 2006, citing a still "adverse and uncertain" global economic scenario.
That is the seventh consecutive hike from a cyclical low of 10.5pc at the end of September last year. The bank had last increased the rate by 0.5 of a percentage point in May.
"The [economic] scenario continues to require caution on the part of emerging countries in an environment of heightened geopolitical tension," the bank said, citing the US' "uncertain economic policies."
The bank also said it increased the interest rate because Brazil's inflation remains above the ceiling of 3pc with a tolerance of 1.5 percentage points above or below. Annual inflation eased to 5.32pc in May. Central bank forecasts for 2025 and 2026 inflation remain at 5.2pc and 4.5pc, respectively, it said.
"Inflation risks, both upside and downside, remain higher than usual," the bank said
