Inflation in Brazil Could Prompt Rate Hike

A rate hike in Brazil would result from inflation, not extra spending by the government, President of the Central Bank of Brazil, Roberto Campos Neto, explained.

“It was interpreted in some way as if the central bank was saying it was going to raise interest rates, and it wasn’t that,” Campos Neto was quoted by Reuters as saying.

“If there is a breakdown or we think that some type of creative accounting will make the long-term debt profile worse, our initial reaction is to remove this instrument that forecasts lower rates for a longer time.”