Brazil’s central bank announced on January 28 that it has decided to keep its benchmark interest rate unchanged, citing persistent inflation risks and global economic uncertainty. The decision follows weeks of speculation over whether policymakers would begin easing borrowing costs to stimulate growth.
Officials said inflation remains above the bank’s long term target, driven by food prices, services costs and currency volatility. While recent data showed some moderation, policymakers stressed that price pressures are still strong enough to warrant a cautious stance.
The central bank also pointed to external risks, including geopolitical tensions and shifting global financial conditions, which could affect capital flows into emerging markets like Brazil. Maintaining stable rates, officials said, is necessary to protect economic stability and investor confidence.
Business groups have urged rate cuts to support investment and job creation, arguing that high borrowing costs are slowing economic activity. However, economists warn that premature easing could weaken the currency and fuel further inflation.
Looking ahead, the central bank said future decisions will depend on inflation trends, fiscal policy developments and global market conditions. Analysts expect rates to remain steady in the near term unless inflation shows a clearer downward path.
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