more variables to take into account the recent international economic situation and market participants noted that the Brazilian central bank policy statement issued may be temporarily "closed hand" implied.
in order to curb inflation in the six-year high, the Brazilian central bank announced on the 20th, the fifth consecutive rate hike to raise rates to the highest in the Group of 20 to 12.5%. Meanwhile, in Asia and other emerging markets, high food prices also continue to develop the Administration's policy challenges.However, many private economists do not believe that the Brazilian central bank can succeed in the next year the inflation rate down to 4.5%, highlighting the grim situation of the country's anti-inflation.
Asia struggling to cope with food inflation
in order to curb inflation continued to soar, Brazil's central bank on Wednesday announced the country's benchmark interest rate again by 25 basis points to 12.5%, which is the line for the fifth consecutive rate hike move in line with market expectations. After consecutive interest rate increases, Brazil's benchmark interest rate at the highest level members of the Group of Twenty.
the previous four months of consecutive rate hike Chile central bank also "ease" this month, announced to keep interest rates unchanged at 5.25 percent. The central bank said the timing of raising interest rates depending on domestic and international macroeconomic environment, the future central bank will continue to adopt a flexible monetary policy, the priority is controlled within 3% expected inflation.
According to the statistics of the cooperative banks in the Netherlands, the proportion of food inflation indicators in Asia more than 30%, while in the U.S World Pipe network informed. and Europe, this proportion is only about 10% and 15%. The higher the sensitivity of food prices means that many emerging economies, policy makers need to taken in the occasion of the global agricultural prices rose more rate hikes to fight inflation.
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than the inflation data from the Central mid-July, Brazil's CPI slowed to 0.1 percent, the slowest level in the 11 months, which may also be allowed the central bank to maintain a wait for some time more safely.
According to projections released by the Brazilian think-tank Institute of Applied Economic, Brazil's annual inflation rate above 7%, significantly more than the government's 4 World Pipe network informed.5% of the control objectives.
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Goldman Sachs economist, Ramos noted that deleted the central bank said in a statement on the interest rate adjustment will continue for a long period of time "wording, which may be implied short-term rate hike cycle peaked signal. He said that the authorities are apparently more concerned about the international economic situation. Brazil's central bank governor Tuomubini recently mentioned several times the global economic situation is quite complex, policy-makers need to be careful to promote.
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Brazilian interest rates the highest in the G20 list
in June, the United Nations prepared by FAO's global food price index rose 1 percent, to 234, close to record highs. The organization believes that most agricultural products increase the speed can not meet demand, global food prices will remain high, to revert to more normal levels before 2008 at least a decade. CBOT futures, for example, brown rice prices in the past year, up nearly 70 percent. In the world's largest grain exporting countries, Thailand, rice export prices over the past year rose 23 percent.
According to Rabobank statistics, in the Asian economies, food accounts for the CPI rose from 10 percent to 45 percent range. Among them, the Philippines and India and other countries, the highest proportion, about 45%.
continued tightening or temporarily "closed hand"
analysts noted that in Asia and other emerging markets, with the rising prices of rice, meat, food inflation is monetary policy authorities increasingly serious challenges.
make matters worse, the current world economy has shown signs of collective signs of cooling down the anti-inflation situation is more complex, and also, therefore, many emerging economies have recently been, or hint at a pause to tighten the pace so as not to dampen domestic economic growth accelerated hot money inflows.
Barclays Capital economist Solomon said, traders will soon be digested in Brazil next month will not raise interest factors. If world economic growth prospects deteriorate, and this week may be the last time this round of rate hikes. However, he still expected the central bank will raise rates by 25 basis points in August and is expected to next year's inflation rate will reach 5.6 percent.
Barclays Capital and Goldman Sachs analysts believe that Brazil during the year whether it will again raise interest rates will depend on whether the global economy will deteriorate further, thereby helping to weaken the inflationary pressures faced by Brazil.
bring trouble to the general public and decision-making at the same time, high food prices has benefited a number of related manufacturing enterprises. Bloomberg prepared to cover the 50 stocks in the Asia-Pacific index for food has accumulated since the beginning of this year rose 8 percent over the same period the MSCI Asia Pacific Index fell 0.6 percent.
the same dilemma faced by the
Brazil's central bank is also considering other emerging economies, policy makers. Bank of Korea announced in mid-month, interest rates unchanged, and temporarily ignore located more than 4 percent of high inflation. Previously, the central bank has five plus interest. Barclays and DBS Bank and other institutions are expected this year, Korea will raise interest rates twice.
previous occasions the monetary policy statement, the bank has said that the adjustment period will last quite a long period of time. But on the 20th of the policy statement is much shorter and did not follow for a long period of time "speech. Many investors said, which suggests that the line now or in the pause in rate hikes. Brazil central bank's next interest rate decision will be announced on August 31.
as Latin America's largest economy, Brazil's inflation rate last year reached a six-year high over the past few months, the inflation rate continues to rise. Official data show that the first five months of this year, Brazil's inflation rate reached 3.71% cumulative, so that in the past 12 months, the rate of inflation reached 6.55%. At present, Brazil's annual inflation rate rose to 6.75 percent.
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