Brazil holds 2013 inflation target steady

BRASILIA: Brazil's National Monetary Council on Thursday held the country's 2013 inflation target steady, clouding views for when the country's sky-high interest rates could match those of global peers.

The council kept the 2013 inflation target at 4.5 percent, plus or minus 2 percentage points.

The target serves as a guide when the central bank sets interest rates. So far this year, policymakers have raised rates four times for a total increase of 150 basis points to try to contain rising prices. Analysts said a quarterly inflation report released Wednesday suggested more tightening could be on the way, as well.

But inflation has nevertheless breached the target ceiling, speeding to 6.55 percent in the 12 months through May.

At 12.25 percent, Brazil's Selic lending rate is among the highest in major economies. While the government wants the number to come down, closer to rates of global peers, inflation has been stubborn.

Central Bank President Alexandre Tombini has said Brazil could at some point see a lower inflation target, closer to rates in developed nations.

The National Monetary Council, known in Brazil as CMN, includes Brazil's planning and finance ministers as well as the central bank president.

Copyright Reuters, 2011