Brazil lifts interest rates further to curb inflation

| March 3, 2011 | 0 Comments

Brazil, which is one of the world’s fastest growing economies, recently admitted that inflation is spiralling out of control.

Yesterday, the central bank lifted its key interest rate to 11.75% from 11.25%, in a bid to tame inflation, which at 5.91% exceeds the Government’s target of 4.5%.

The move, which was widely expected, is the second time in three months the central bank has raised rates.

Inflationary pressures are rife throughout many major economies in the world and many central banks have opted to hike interest rates in an attempt to combat soaring prices.

In the last few weeks, central banks in China, Indonesia and India have all increased interest rates.

Meanwhile, Brazil‘s economy, which is the largest in Latin America, grew more than 7% in 2010 and is forecast to expand between 4.5% and 5% in 2011.

Former President Luiz Inacio Lula da Silva, said Brazil will become the world’s fifth largest economy by 2016.

The economy appears to be bucking the trend after creating 1.3 million jobs last year – when other economies are battling with rising unemployment.

In other news, Brazilian industrial production grew by 0.2% in January on a month basis - confounding expectations of a 0.7% fall.

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