09:24 AM EDT, 09/19/2024 (MT Newswires) -- Brazil's central bank unanimously agreed on a 25bps rate hike late Wednesday with the Selic rate raised to 11.75%, going against the United States Federal Reserve tide and partially aligning itself with the market's views on required tightening, said Societe Generale.

More rate hikes -- the bank expects between 50bps-100bps -- will follow in the upcoming meetings unless things improve sharply on the fiscal front or the domestic/global macroeconomic/financial environment significantly worsens, wrote SocGen in a note to clients.

Brazil already has a high real interest rate, and while the current tightening cycle might not last long, the high rates still threaten to further imbalance the fiscal account and impact the macro outlook unless politicians choose to respond quickly, stated the bank.