RIO DE JANEIRO, May 16 (Xinhua) -- The Brazilian Central Bank's Monetary Policy Committee announced late Wednesday that the country's annual basic interest rate will stay at 6.5 percent.
The announcement surprised the market as financial agencies and investors were expecting a 25-point cut in the key Selic rate from 6.5 percent.
Wednesday's announcement also marked the end of 12 consecutive cuts in the Selic rates since October 2016. The key rate fell 7.75 points during the period as the Brazilian central bank took actions to curb surging inflation.
The committee attributed its decision to the recent volatility in the Brazilian Real-U.S. dollar exchange rate. On Tuesday, the dollar traded at 3.66 real, a two-year high. The real has lost 10 percent of its value against the dollar since January.
While saying the current interest rate is suitable considering the global inflation risks, the committee said its future decision will depend on the evolution of the economic activity and expectations for the inflation rate.