The central bank has issued an alert that because the inflation outlook has become “far less favorable” and growing higher than the government's target of 4.5%-- there is a “need to implement, in the short-term, a rise in the basic rate of interest.”
Brasil's Selic rate of 10.75% is already one of the highest in the world.
Alexandre Tombini (pictured),the new central bank president, takes office in early January -- and may move quickly to raise rates at the next monetary policy meeting, scheduled for Jan. 18 and 19.
However, President-elect Dilma Rousseff has vowed to bring down real interest rates in her four years in office.