Brazil's central bank raises key rate by 100 basis points

"Copom voted unanimously to boost the benchmark interest rate to 12.75 percent per year, an increase of 1.00 percentage point. The committee recognizes that this decision reflects uncertainty about its scenarios as well as the prospect of much more dispersion in expected inflation than typical," according to the communiqué.

External conditions have continued to deteriorate, while domestic consumer inflation has risen, according to the organization's specialists. According to their projections, by the end of the year, the dollar exchange rate will be over 4.95 Brazilian reals and the price of oil would be at $100 per barrel.

The new key rate of 12.75 percent set by the Brazilian central bank is the highest since 2017. It has been raised eleven times in a row, and monetary officials have not ruled out another increase following a meeting in mid-June, but it will be less significant.

Inflation has "exceeded the bank's estimates" this year, according to central bank governor Roberto Campos Neto. In April, the IPCA-15 index for major commodities, which is a leading predictor of overall inflation, increased by 1.73 percent, bringing the 12-month total to 12 percent.

source: reuters.com