Tightening move reflects inflation concerns
Inflation looks in check, but it remains a headache for the authorities.
Speculation that the exchange rate and the Selic would go even lower this week has dissipated
Recent price pressures are unlikely to change the central bank.
On August 29, the central bank cut rates by 50bp to 7.5%.
Consumer prices rose 0.33% MoM in mid-July, above market expectations, owing largely to food and services.
For the first time, the market consensus points to inflation below 5% this year
Local commentators find little sunshine in first-quarter growth figures
Even when the central bank has been bolder than expected this year, inflation expectations have remained in check.
The transition to tight fiscal policy and loose monetary policy has some way to go, says Pedro Carvalho de Mello