Central Bank Raises Interest Rate from 9.0% to 9.5%

10/10/2013 - 08h45

Brazil's Central Bank raised the interest rate by 0.5% on Wednesday. The rate, which now stands at 9.5% per year, has been raised five times in succession.

The decision was unanimous, and confirmed predictions by economists based on current levels of inflation. Inflation recorded a high of 5.86% in the last 12 months, ending in September.

Raising interest rates is a means employed by the government to curb consumption, since credit - both loans from financial institutions and credit in stores - becomes more expensive. With less demand, inflation tends to fall.

Translated by TOM GATEHOUSE

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