Brazil’s central bank has raised its basic interest rate by a quarter point to 10.75 per cent, in its first resort to monetary tightening under President Luiz Inácio Lula da Silva.
The institution cited a stronger than expected labour market and economic activity. It last increased the Selic benchmark in August 2022.
The decision goes in the opposite direction to the US Federal Reserve and several regional peers.
Forecasts for Brazil’s growth and inflation have edged up lately and those, combined with fiscal concerns, have put pressure on the central bank to act.
A new governor is due to take charge next year after being chosen by Lula, who has criticised high borrowing costs.
