Brazil’s central bank on Wednesday left its key interest rate at 6.5 percent, in its board’s last meeting before far-right president-elect Jair Bolsonaro takes office on January 1.
The rate has been kept at that level since March, after several preceding cuts.
Market analysts had expected it to remain untouched.
The bank said in a statement that, even though Latin America’s biggest economy was on the path to growth after a 2015-2016 recession that was its worst on record, “conditions still require monetary policy stimulus.”
It said that austerity reforms brought in under outgoing President Michel Temer needed to continue to keep inflation under control and set the groundwork for a durable economic recovery.
Bolsonaro is to create an economy superministry aimed at cutting costs and launching privatizations to bring down the country’s high public debt.
He had hoped to keep the current central bank chief, Ilan Goldfajn, in his post, but Goldfajn has said he will be leaving at the end of the year for personal reasons.
Goldfajn will be replaced by Roberto Campos Neto, a 49-year-old executive of Santander bank who is also the grandson of a man who championed economic liberalism in Brazil.
The bank’s next meeting will take place under Campos Neto on February 5-6.
Market watchers expect inflation of 3.71 percent this year — against 2.95 percent last year — and growth of one percent.
Next year should see inflation of 4.07 percent and growth of 2.53 percent, according to their forecasts.