BRASILIA, Sept 28 (Reuters) – Brazil’s central bank weighed accelerating the world’s most aggressive monetary tightening, minutes from its last policy meeting showed on Tuesday, but uncertainty about a post-pandemic rebound led it to stay the course on 100-basis-point rate hikes.
The minutes of the Sep. 21-22 meeting, when the bank raised its Selic policy rate to 6.25%, showed policymakers plan more increases of that size taking rates to “significantly restrictive” levels in order to hit their 2022 inflation target.
The aggressive rate hikes have put Brazil on the front line of a global battle against climbing consumer prices, lifting its benchmark rate from a record-low 2.00% at the start of the year as 12-month inflation pushes into double digits.
Still, the bank’s rate-setting committee, known as Copom, conceded in Tuesday’s minutes that their baseline scenario showed inflation “slightly above” the 2022 target for the first time, stirring debate about the need for even tougher policy.
“Copom evaluated the costs and benefits of accelerating the pace of interest rate hikes,” policymakers wrote in the minutes.
Ultimately, they made another 100-basis-point hike last week and forecast the third in a row next month, citing “already effectively tightening monetary policy” and benefits of getting …….