The latest move to curb inflation was to raise the key rate. Brazil's central bank's monetary policy committee raised it by half a point to 9 percent. "believing that this operation will help to reduce the rise in prices and ensure that this downward trend continues over the course of next year".
Currently, the collapse of the real – which has lost 20 percent of its value against the dollar since the beginning of the year – has pushed inflation to 6,15 percent. A phenomenon, that of the devaluation of the currency, driven by capital flight, in turn fueled by the Fed's decision to reduce the stimulus plan. Other emerging countries, including Southeast Asia, are also facing similar problems, exacerbated by Syrian uncertainty.
"Higher interest rates will help Brazil control inflation and boost investor confidence," the International Monetary Fund said yesterday. According to Fabio Akira, chief economist for Brazil at JP Morgan interviewed by the BBC, there may be further increases: the expert expects growth of 50 basis points in October and another 25 by the end of the year.
Meanwhile, investors continue to wonder how long and how far the crisis in emerging countries will go. The fear is that some of these states are not equipped enough to deal with such shocks.
