By Marcela Ayres
BRASILIA (Reuters) -Brazil's central bank held interest rates steady for a third straight meeting on Wednesday, signaling greater confidence that holding borrowing costs at current levels
for an extended period will be enough to bring inflation back to target.
The bank's monetary policy committee, known as Copom, unanimously held the benchmark Selic rate at 15%, its highest level since July 2006, an outcome expected by all 40 economists polled by Reuters between October 27 and 31.
"The committee evaluates that maintaining the interest rate at its current level for a very prolonged period will be enough to ensure the convergence of inflation to the target," the central bank said in its statement.
The slightly revised message shows policymakers are now more confident in their current strategy, after they said in the previous meeting that they would continue assessing whether the rates-on-hold approach would be sufficient.
The central bank said the current scenario remains marked by unanchored inflation expectations relative to the 3% target, high inflation projections, resilient economic activity and labor market pressures.
It also kept unchanged a reference saying it would not hesitate to raise interest rates if needed, maintaining its hawkish stance amid assessments that Latin America's largest economy is slowing as expected, while the labor market remains strong.
Wednesday's decision came after the government became more vocal in criticizing borrowing costs in Latin America's largest economy, following a long period of restraint toward the central bank, which since January has been led by Gabriel Galipolo, a nominee of leftist President Luiz Inacio Lula da Silva.
Finance Minister Fernando Haddad on Tuesday urged a rate cut, saying that real rates of 10% "make no sense."
Policymakers in July halted an aggressive tightening cycle that had added 450 basis points to the benchmark rate to bring consumer prices back to target.
(Reporting by Marcela Ayres; Editing by Kylie Madry)
