31 Jul 2015
The Brazilian Central Bank has increased its interest rate by 0.5% to 14.25% in an attempt to stabilise the currency and combat inflationary pressures. The economy is expected to contract this year by 2.5%.
The real is now trading at a 12 year low against the dollar and interest rates are at their highest level since 2006. Inflation is now running at 9.15% and many prices are increasing simply because people expect them to.
According to Goldman Sacs the world economy is experiencing a “negative feedback loop.” Commodity prices are spiralling downwards as Chinese demand cools, causing the currency of commodity ...