Brazil Leaves Lending Rate Unchanged

The bank's monetary policy committee, known as Copom, voted to hold the rate for the first time following 26 straight months of 0.25 or 0.50 percentage point cuts. The bank has slashed the rate by a combined 8.5 percentage points since September 2005.

"Evaluating the macroeconomic outlook, Copom decided unanimously to pause in the process of monetary policy easing and maintain the rate... with no bias," the committee said in a statement.

Brazil's economy grew robustly in the second quarter, and although industrial production is soaring -- increased food and automotive output helped push production up 1.3 percent in August, double what had been expected -- analysts worry it may not be growing fast enough to keep pace with creeping demand.

According to the central bank's latest weekly market survey, inflation is now projected to end 2007 at 3.91 percent, down from the 4.01 percent forecast in the previous survey.

Some analysts suggested the central bank opted for a pause Wednesday to gauge the effects that past rate cuts have had on the economy, Latin America's largest, and predicted it would likely lower rates again in coming months if inflation remains within the bank's 4.5 percent target annual rate.

The bank's next interest rate announcement is scheduled for Dec. 5.