BRASILIA Jan 24 Brazil's central bank said on
Thursday that a recent pick-up in inflation was due to expiring
tax breaks and seasonal transportation pressures, but again
signalled that interest rates will remain on hold for some time.
The central bank held rates steady for the second straight
time at 7.25 percent at its last meeting on Jan 16, in a bid to
fire up a fragile economic recovery without fueling already high
In the minutes of that meeting, the bank warned that
inflation has worsened in the short-term and that the recovery
in domestic activity has been less intense than expected.
The government of President Dilma Rousseff is scrambling to
keep a lid on inflation, which rose faster in the month to
mid-January than most analysts expected. Trailing 12-month
inflation rose to 6.02 percent in mid-January, well above that
of regional peers like Mexico and Chile whose economies are
growing at a much faster pace.