Alexandre Tombini, Governor of the Central Bank of Brazil, said that the central bank has no plans to cut interest rates. While the news was positive for the Brazilian real, the currency had troubles rising against the US dollar.
The bank left its main interest rate at 14.25% last month. While reduction of borrowing costs might be helpful for spurring economic growth, inflation that stays above 10 percent does not make monetary policy easing an appealing prospect. As Tombini put it:
This inflation outlook does not allow for consideration of looser monetary policy
USD/BRL traded near the opening level of 4.0440 as of 13:10 GMT today after rising to the session maximum of 4.0582 and falling to the minimum of 4.0249.
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