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Brazil maintains key interest rate at 6.5%

Brazil maintains key interest rate at 6.5%

Brazil’s central bank maintained its key interest rate at 6.5 per cent Wednesday, as expected, with inflation considered to be under control despite strong depreciation of the real and a costly truckers’ strike.

The bank said the truckers’ strike, which shut down much of the economy for more than a week in May, “made it difficult to read the current evolution of economic activity.”

The bank also said that inflation would spike following the strike, which saw shop shelves and factories starved of deliveries, driving up prices.

However, this inflationary rise will be temporary, the bank said.

“The basic scenario is for a continuation of the process of recovery in the Brazilian economy, but at a more gradual rate,” the bank said in a statement.