Brazil holds key interest rate after 12 straight hikes

Brazil's central bank has kept its key interest rate unchanged for the first time since March last year after seeing a downward trend in the country's inflation rate.

The bank's rate-setting committee decided to maintain the benchmark interest rate at 13.75 percent at a meeting in the capital Brasilia on Wednesday.

The central bank raised the rate at 12 straight meetings amid soaring national food prices due to a surge in global energy prices and bad weather.

But Brazil's consumer price index fell to an annual pace of 8.7 percent in August, a single-digit increase for the first time in a year. The drop came as crude oil prices declined over concern about a possible worldwide economic slowdown.

Still, the policymakers said in a statement, "The Committee reinforces that future monetary policy steps can be adjusted and will not hesitate to resume the tightening cycle if the disinflationary process does not proceed as expected."

Brazil will hold a presidential election on October 2. Incumbent President Jair Bolsonaro is stressing that his economic policies were responsible for the drop in the inflation rate, as rising prices are becoming one of the major issues for voters.