Food price rises may hold Brazilian interest rate cut
Recent food price rises could hold back any prospective interest rate cut in Brazil.
The Brazil’s central bank is keen to hold back any inflation increases, although current indicators are below target, in a bid to maintain economic stability in the country.
Currently Brazil’s interest rates stand at 11.5 per cent, the highest level in Latin America, but there had been hopes that they would be cut by a quarter per cent.
Nathan Blanche, an economist at research company Tendencias Consultoria, told Bloomberg: "Signs of inflation in the domestic market will force the central bank to be more parsimonious.”
Food prices rose 1.27 per cent in July putting pressure on general inflation, which the central bank will be keen to nip in the bud.
