UPDATE 3-Brazil holds interest rates again to battle high prices

miércoles 8 de junio de 2016 19:30 GYT

(Adds comments from economist, market expectations)

By Alonso Soto

BRASILIA, June 8 (Reuters) - Brazil held interest rates steady for the seventh straight time on Wednesday, resisting pressure to slash borrowing costs amid a recession as inflation remains near double digits.

In a unanimous vote, the central bank's monetary policy committee, known as Copom, decided at its last meeting led by governor Alexandre Tombini to keep its benchmark Selic rate at 14.25 percent, the highest in nearly a decade.

A deepening recession and lingering political turmoil is renewing pressure on the central bank to start cutting borrowing costs to ease a crisis that has cost nearly 2 million jobs over the last year.

Despite the recession, which could be the worst in the country's history, inflation has remained persistently high due to rising government-controlled prices and a weaker currency.

The central bank exactly repeated its last decision statement, acknowledging it has made some progress in battling a surge in prices, but not enough to prompt policymakers to cut rates now.

Inflation rose to 9.32 percent in the 12 months through May, above market expectations and the 4.5 percent center of the official target range, according to official data released earlier on Wednesday.

Interim President Michel Temer, who took over from Dilma Rousseff as she stands trial for allegedly breaking budget laws, has vowed a shift toward more market-friendly policies to rebuild investor confidence in the once-booming economy.   Continuación...