brasilia march 22 reuters  brazils central bank kept interest rates unchanged for the fifth consecutive policy meeting on wednesday citing a continued rise in inflation expectations and weakening bets of monetary easing beginning anytime soon the banks ratesetting committee known as copom maintained its selic benchmark interest rate at 1375 the decision which defied intense pressure from the new government of president luiz inacio lula da silva to reduce borrowing costs matched the expectations of all 30 respondents in a reuters poll taking into account the uncertainty of the scenarios the committee remains vigilant assessing if the strategy of maintaining the selic rate for a long period will be enough to ensure the convergence of inflation policymakers wrote in the banks weekly survey they dropped the reference to maintaining the rate beyond the period expected by the market the committee emphasizes that it will persist until the disinflationary process consolidates and inflation expectations anchor around its targets which have shown additional deterioration especially at longer horizons they added despite unanimous expectations for the decision several economists expected the central bank to mention challenges to the global economy which could potentially create space for rate cuts to begin earlier than previously anticipated after highprofile us bank closures and the credit suisse rescue the central bank acknowledged the worsening global environment amid banking turmoil but emphasized that recent data on global activity and inflation have remained resilient the bank also noted that the process of monetary policy tightening in major economies continued to advance following the federal reserves decision to continue raising us interest rates while policymakers emphasized that the government decision to resume fuel taxes has helped to improve public accounts they said that highly volatile financial markets and longterm inflation expectations beyond their targets require further attention when conducting monetary policy inflation has cooled to 56 in the 12 months through february but it is still far above this years 325 official target meanwhile the central banks inflation expectations have risen to 58 for 2023 and 36 for 2024 next year the target is 3 lula has repeatedly called for lower borrowing costs describing the current selic rate irresponsible on tuesday the president also put off a proposal for new fiscal rules to keep a lid on public debt levels – one of several upward inflation risks flagged by the central bank at recent policy meetings investors are anxiously awaiting a new fiscal framework in brazil after lula got congressional approval for a major spending package bypassing a constitutional spending cap to meet campaign promises reporting by marcela ayres editing by lincoln feast and richard chang