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Latino Daily News

Thursday January 20, 2011

Brazil Spikes Its Interest Rates to 11.25%

In an effort to curb inflation Brazil’s central bank hiked its key interest rate to 11.25% from 10.75%, the first under the country’s new President, Dilma Rousseff.

The very attractive rate of interest will continue to attract foreign investment and foreign money and add to the currently overvalued Brazilian real.  Inflation worries nonetheless continue, inflation was 5.91% last year and is predicted to hover around 5% this year.

Brazil is Latin America’s largest economy, growing 7% last year and is anticipated to grow between 4.5% - 5% in 2011.