Brazilian Central Bank signals hike in benchmark interest rate due to inflation worries

Brazil signals hike in benchmark interest rate

SAO PAULO — The Brazilian Central Bank signaled Thursday that a hike in the nation’s benchmark interest rate is likely in the next month to stem inflation.

In minutes released from last week’s monetary policy committee meeting, the bank said there was a consensus among committee members to adjust the rate — but not until their next meeting at the end of April, at the earliest.

Last week, the monetary policy committee kept the Selic rate at 8.75 percent, its historic low, in part because the government was to start withdrawing some stimulus measures taken at the onset of last year’s financial crisis.

The government’s inflation target now stands at 4.5 percent this year, though the latest survey by the central bank of private economists has forecasted 5.1 percent.

Also Thursday, the government said Brazil’s unemployment rate increased slightly to 7.4 percent in February, from 7.2 percent last month.

The governmental statistics agency IBGE says the number of unemployed remained “steady” at 1.7 million — down 1.1 percent compared to February of last year.

IBGE director Cimar Azeredo told the private Agencia Estado news service Thursday that the consistent numbers indicate that the economy is “absorbing the temporary workers hired at the end of last year.”