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.

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