The Brazilian Central Bank (BCB) has announced that interest rates have increased again for the fourth straight time as it seeks to rein in persistent inflation, and indicated more rate increases could be on the way soon.

Policymakers voted unanimously to raise the so-called Selic rate to 12.25% from 12%.

In a statement that was nearly identical to that of its April rate hike, the bank said it had weighed risks to inflation and the still uncertain signs as to what extent Brazil’s economic boom is slowing.

The bank said that, as a result, it believed that the ‘most adequate strategy’ to bring inflation back down to the centre of its target range next year was tight monetary policy ‘for a sufficiently prolonged period.’

While monthly inflation is slowing after a surge on higher commodity prices and strong demand, 12-month inflation remains above the upper limit of the government’s target, reaching 6.55% in May.

Central Bank President Alexandre Tombini has said the bank’s policymakers are committed to ending the year with inflation as close as possible to the government target of 4.5%, plus or minus two percentage points.
Strong inflation puts Brazil among a group of powerhouse emerging markets, such as China and India that are raising interest rates to try to control the price pressures that come with brisk growth.