Brazil's financial market has high expectations that the interest rate will rise to 14 percent this year, the Central Bank said Monday.
The Monetary Policy Committee Wednesday increased the basic interest rate by 0.5 percent to 12.25 percent, confirming analysts' predictions.
The analysts previously forecast a slight fall in the interest rate, indicating that investors' confidence had been shaken by Brazil's move to pay its external debt, a weekly report of the Central Bank said.
It was also estimated that gross domestic product (GDP) and industrial production will rise by 4.77 percent and 5.60 percent respectively this year.
While expecting direct foreign investment in Brazil to maintain its 33 billion-U.S. dollar level, the financial market forecast that the trade balance surplus may shrink to 23 billion U.S. dollars from 40 billion U.S. dollars last year.
The analysts projected the exchange rate of Brazilian currency real would be 1.7 to the U.S. dollar by the end of this year, increasing by 0.07 reais compared with the present figure, said the Central Bank.
Source: Xinhua
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