The Board of the Central Bank decided to apply the highest interest rate hike in 20 years, raising the governing rate by 125 basis points, that is, it went from 1.50% to 2.75%.

The decision was adopted unanimously by the five members of the Council.

The increase is greater than what the market expected, since the projections advanced a figure between 75 and 100 basis points, projections that, finally, were below the real rise.

“The evolution of the macroeconomic scenario has increased the risks for inflation to converge to the 3% target within the policy horizon. Although core inflation has evolved as expected, the outlook for the next few months has been increasing, in a context in which inflation expectations for two years are above the 3% target, “said the entity. through a statement.

“The Board has decided to advance the withdrawal of the monetary stimulus, anticipating that the MPR will reach its neutral level earlier than expected in the central scenario of the September Report,” the text added.

In addition, the Central Bank reported that it agreed to suspend the reserve accumulation program started in January of this year, “due to the recent evolution of the financial market and the level of international reserves already reached.”

The surprise rise in the interest rate to 2.75 percent comes amid a sharp rise in inflation. In fact, the September CPI reached 1.2 percent.

The Board of the Central Bank decided to apply the highest interest rate hike in 20 years, raising the governing rate by 125 basis points, that is, it went from 1.50% to 2.75%.

The decision was adopted unanimously by the five members of the Council.

The increase is greater than what the market expected, since the projections advanced a figure between 75 and 100 basis points, projections that, finally, were below the real rise.

“The evolution of the macroeconomic scenario has increased the risks for inflation to converge to the 3% target within the policy horizon. Although core inflation has evolved as expected, the outlook for the next few months has been increasing, in a context in which inflation expectations for two years are above the 3% target, “said the entity. through a statement.

“The Board has decided to advance the withdrawal of the monetary stimulus, anticipating that the MPR will reach its neutral level earlier than expected in the central scenario of the September Report,” the text added.

In addition, the Central Bank reported that it agreed to suspend the reserve accumulation program started in January of this year, “due to the recent evolution of the financial market and the level of international reserves already reached.”

The surprise rise in the interest rate to 2.75 percent comes amid a sharp rise in inflation. In fact, the September CPI reached 1.2 percent.

The Board of the Central Bank decided to apply the highest interest rate hike in 20 years, raising the governing rate by 125 basis points, that is, it went from 1.50% to 2.75%.

The decision was adopted unanimously by the five members of the Council.

The increase is greater than what the market expected, since the projections advanced a figure between 75 and 100 basis points, projections that, finally, were below the real rise.

“The evolution of the macroeconomic scenario has increased the risks for inflation to converge to the 3% target within the policy horizon. Although core inflation has evolved as expected, the outlook for the next few months has been increasing, in a context in which inflation expectations for two years are above the 3% target, “said the entity. through a statement.

“The Board has decided to advance the withdrawal of the monetary stimulus, anticipating that the MPR will reach its neutral level earlier than expected in the central scenario of the September Report,” the text added.

In addition, the Central Bank reported that it agreed to suspend the reserve accumulation program started in January of this year, “due to the recent evolution of the financial market and the level of international reserves already reached.”

The surprise rise in the interest rate to 2.75 percent comes amid a sharp rise in inflation. In fact, the September CPI reached 1.2 percent.

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