Brazil raised interest rates on Wednesday for the sixth straight time, ending a short-lived era of single-digit borrowing costs that failed to reignite Latin America's largest economy and instead fed inflation.
The central bank's monetary policy committee, known as Copom, unanimously raised its Selic to 10 percent from 9.50 percent -- its highest level since March of 2012. All but two of the 62 analysts polled by Reuters last week expected the bank to hike rates by half a percentage point for the fifth straight time after a quarter percentage point increase in April.
The bank removed from its decision statement a previous reference to monetary policy setting inflation on a declining trend for next year. Analysts saw that as a sign the bank may slow the pace of future rate hikes.
"With the changes in the statement, the bank signals it has become more data dependent to decide between a 25 and a 50-basis-point hike in the next meeting," said Mauricio Molan, chief economist with Santander Brasil.
The removal of the word inflation in the statement was interpreted by some economists to mean the bank was now going to shift its focus to future activity, which has struggled to pick up.
