VOICED : BC de Brasil mantiene tasa de referencia en 14,25%

The Central Bank of Brazil decided to maintain the reference interest rate at 14.25% due to persistent high inflation and a worsening recession amid political turmoil. Despite some progress in combating inflation, the high 12-month inflation rate and official expectations of 6.5% leave no room for monetary policy easing. The rate has been fixed since July 2015. Following a spike in inflation that year, the Central Bank now forecasts price increases of 6.6% in 2016 and 4.9% in 2017. High interest rates make credit expensive and slow economic growth, with Brazil's economy contracting by 3.8% last year. The IMF anticipates another decline in 2016. The Central Bank's decision reflects the political uncertainty overshadowing Brazil's economy, as the Senate prepares to decide whether President Dilma Rousseff should be removed from office over alleged fiscal mismanagement in 2014 and early 2015.

Why did the Central Bank of Brazil decide to keep the interest rate at 14.25%?

• To support the housing market

• To align with international interest rates

• Due to high inflation and a worsening recession

• To encourage economic growth

What is the Central Bank's forecast for price increases in 2017?

• 4.9%

• 14.25%

• 3.8%

• 6.5%

How did the Brazilian economy perform last year?

• It contracted by 3.8%

• It grew by 6.6%

• It remained stable

• It grew by 3.8%

What is the IMF's expectation for Brazil's economy in 2016?

• Stability

• Rapid recovery

• Growth

• Another decline

What political event is the Brazilian Senate preparing for?

• A decision on President Rousseff's removal

• A new election

• A referendum on interest rates

• A vote on economic reforms