Chief of staff Antonio Palocci, described by some as the most influential member of President Dilma Rousseff's government, said he quit to prevent a corruption scandal from further weakening her five-month-old administration. But as the government tries to rein in inflation and its soaring currency, the question on many minds is: Will tight money and new taxes on foreign capital derail one of the greatest economic growth stories on the planet? On June 16, in the face of signs that inflation is easing, Reuters reported that the Brazilian central bank hinted that another interest rate is coming. The benchmark Selic rate (the Banco Central do Brasil’s overnight lending rate, which is comparable to the Fed funds rate) is now at 12.25 percent.
Read Full Article »
