Brazilian Real Weakens Despite Outlook for Higher Interest Rates

The Brazilian real fell today even though the nation’s central bank will likely continue raising interest rates to combat growing inflation. This is an unusual stance among central banks, especially in emerging economies, which prefer monetary easing, not tightening.
The Central Bank of Brazil has raised its key interest rate last week, as was expected by analysts. The bank also suggested that inflation will remain high for some time, meaning that additional rate hikes are likely. Yet the worsening economic situation in the country damages the attractiveness of the real.
USD/BRL advanced from 2.3733 to 2.3982 as of 19:52 GMT today.

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