Even Brazil’s Billionaires Scrap Investment Plans as Rates Hit Double Digits
- Economists see inflation remaining above central bank target
- Lula’s approval stands at 24% after the market meltdown
After inflation expectations soared, Brazil’s central bank started to raise borrowing costs last September.
Photographer: Andressa Anholete/BloombergThis article is for subscribers only.
When Brazil’s interest rates hit 12.25% in December, it soon became clear that even billionaires couldn’t make the market work for them.
Rubens Ometto said the latest increase in borrowing costs was behind his decision to sell his 9 billion reais ($1.58 billion) stake in mining giant Vale SA the following month. He said he had to reduce his conglomerate Cosan SA’s leverage and pay down debt. Rates have since gone up to 13.25%.