The monetary policy committee of Brazil's central bank kept the Selic rate unchanged at 6.50% per year, citing favorable inflation developments.
Banco Central do Brasil said measures of underlying inflation, which include elements sensitive to the business cycle and monetary policy, have been running at low levels.
The bank noted that the monetary policy committee's inflation projections are at 3.6% and 3.9% for 2018 and 2019, respectively. "This scenario assumes a path for the policy interest rate that ends 2018 at 6.5% [per annum], and 2019 at 8.0% [per annum]," it said.
"The evolution of the baseline scenario and, mainly, of the balance of risks made it unnecessary to ease monetary policy further in order to mitigate the risk of delayed convergence of inflation toward the targets," the central bank added.