UPDATE 2-Brazil central bank bets on stable rates to curb inflation
(Adds analyst comments, and minutes' details)
By Alonso Soto
BRASILIA, Sept 11 (Reuters) - Brazil's central bank signaled it would keep interest rates high for some time to curb inflation, resisting pressures to cut borrowing costs to help lift the economy out of a recession.
In the minutes released Thursday from its last rate-setting meeting, the bank said keeping interest rates at current levels, the highest since 2012, would bring inflation down toward the official target of 4.5 percent.
The bank last week kept its benchmark Selic rate on hold at 11 percent for the third straight policy meeting. It also altered its decision statement to suggest it would maintain the high rates at least until the end of this year.
"The central bank very strongly suggests that it does not intend to cut rates," said Gustavo Rangel, chief economist for Latin America at ING. "What we have here is the maintenance of a fairly neutral guidance, but it's a very short-term guidance because it will all depend on who wins the election."
Ahead of presidential elections next month, politically powerful industrial groups have lobbied the bank to cut interest rates.
Those pressures grew after data released two weeks ago showed that Brazil slipped into recession early in 2014 for the first time in five years.
The bank has eased some reserve requirements to bolster credit but kept interest rates high to avoid any criticism of undue intervention before the contested presidential election. Continuación...