ISTANBUL

Brazil’s central bank kept its interest rate unchanged at 13.75%, in line with market expectations, it announced late Wednesday.

The rate has been the highest since January 2017.

Banco Central Do Brasil last made a rate hike of 50 basis points on Aug. 3, 2022, carrying the interest rate to 13.75%, which is significantly up from the record low of 2% in March 2021.

"The global environment remains challenging," the central bank said in a statement, and added: "The episodes involving banks abroad have increased the uncertainty, but with limited contagion on financial conditions so far, requiring constant monitoring" about the recent banking crisis in the US and Europe.

Banco Central Do Brasil said central banks of major economies around the world remain committed to bringing inflation back to their targets in an environment in which inflation has been resilient.

The central bank said it estimates inflation in the country to be around 6.1% this year and 4.2% next year, according to its survey.

Brazil's annual consumer inflation slowed to 4.65% in March, marking the lowest level since January 2021, and posting a sharp decline from 10.07% in July 2022.