Brasília (AFP) – Brazil’s Central Bank on Wednesday held its benchmark interest rate steady at 15 percent after seven straight hikes that had angered leftist President Luiz Inacio Lula da Silva. The announcement came as US President Donald Trump slapped a 50 percent tariff on Brazilian goods, spelling potential trouble for South America’s biggest economy.
The benchmark rate, known as the Selic, remains at its highest level since 2006, and is one of the highest in the world. The bank had raised the rate seven times in succession, in a bid to curb inflation. The last time, in June, it cited “heightened geopolitical tensions” and adverse external conditions given “the economic situation and policy in the United States.” Lula has argued high interest rates stifle growth.
Earlier Wednesday, Trump ordered massive tariffs on the country and sanctions against the judge overseeing the coup trial of his far-right ally Jair Bolsonaro, Brazilian Supreme Court Justice Alexandre de Moraes. Unlike the tariffs Trump is slapping on economies around the world, the measures against Brazil have been framed in openly political terms, sweeping aside centuries-old trade ties and a surplus that Brasilia put at $284 million last year.
© 2024 AFP
