MNI BRIEF: Copom Accelerates Pace And Hikes Selic By 100BP

MNI (BRASILIA) - The Central Bank of Brazil (BCB) unanimously decided to accelerate the pace of its rate hikes, raising the official Selic rate by 100 basis points to 12.25% Wednesday. The board also indicated more cuts of the same size at the the next two meetings.

The move generally exceeded market expectations of a 75bp hike, though some analysts had suspected a full point increase.

"In light of a more adverse scenario for inflation convergence, the Committee anticipates further adjustments of the same magnitude in the next two meetings, if the scenario evolves as expected," the statement said.

This marks the third consecutive rate hike amid a worsening inflation outlook driven by a disappointing fiscal package announced by the government and significant currency depreciation. The BCB had already increased the size of its rate hikes to a half-point from a quarter-point in November. (See MNI INTERVIEW: Copom To Accelerate Rate Hike Pace To 100BP)