The Brazilian real rose today after Brazil’s central bank raised the Selic rate yesterday, extending the string of rate increases. The increase was smaller than last month’s one, leading to concerns that the central bank will pause rate hikes. Still, the nation’s economy looks good, meaning that Brazil’s currency is still attractive to overseas investors.
The Central Bank of Brazil boosted its main interest rate by 0.25 percent to 10.75 percent on yesterday’s policy meeting. Brazil’s economy returned to growth and inflation accelerated, easing worries about potential reduction of the sovereign credit rating. This allowed the real to rally 3 percent in February.
USD/BRL was down from 2.3510 to 2.3322 as of 16:48 GMT today.
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