| Brazil Bank Sees Faster Inflation as Economy Recovers |
| News - Americas |
| Written by Andre Soliani, Bloomberg |
| Friday, 25 September 2009 13:31 |
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Sept. 25 (Bloomberg) -- Brazil’s central bank forecasts faster inflation in Latin America’s biggest economy over the next two years, prompting traders to bet the benchmark interest rate may be raised as early as January.
Policy makers expect an annual inflation rate of 4.6 percent in the first quarter of 2011, up from 4.4 percent in 2010 and 4.2 percent for 2009, according to the so-called reference scenario in the bank’s quarterly inflation report posted today on its Web site. The bank targets annual inflation of 4.5 percent, plus or minus two percentage points. To slow inflation as economic growth quickens, the central bank will raise the benchmark interest rate in January to 9.03 percent from 8.75 percent, according Bloomberg estimates based on overnight rate-futures contracts. The rate may rise as far as 12.43 percent by December 2010, according to the estimates. |