ANKARA

Brazil’s central bank on Wednesday made a rate hike of 50 basis points, and signaled more are on the way, as the world grapples with high inflation and most central banks are undertaking an aggressive rate hiking cycle.

The bank’s monetary policy committee members agreed unanimously to raise the benchmark interest rate to 13.25%, in line with the market expectation, up from 12.75%.


This marks the highest interest rate level since early 2017, and it is significantly up from the record low level of 2% in March 2021.

"The global environment has deteriorated further, marked by downward revisions on prospective global growth in an environment of strong and persistent inflationary pressures," the bank said in a statement.

The central bank signaled additional rate hikes would come in future, saying: "it is appropriate to continue advancing in the process of monetary tightening significantly into even more restrictive territory."

The bank also emphasized that "it will persist in its strategy until the disinflation process consolidates and anchors expectations around its targets."

Inflation in Brazil is expected to come in at 8.8% in 2022 and 4% in 2023, according to the bank's monetary policy committee.