Brazil's central bank kept interest rates unchanged on Wednesday, as expected, refraining from hiking even after a sharp currency slide as policymakers highlighted the unclear impact of a nationwide protest by truckers in late May. The statement from the bank's nine-member monetary policy committee, which kept the benchmark Selic rate at 6.50 percent, raises the stakes for upcoming economic indicators, which may be key to determining the committee's next moves.

All but one of 38 economists polled by Reuters had forecast the bank would stand pat. "The temporary halt in the transportation sector in May makes it more difficult to assess the recent evolution of economic activity," the bank said in its policy statement. "April data suggest more consistent activity relative to previous months. Indicators for May - and possibly June -, however, are likely to reflect the effects of the aforementioned halt."

The Brazilian real slumped in recent weeks as concerns over an unpredictable October election and the erratic policy response to striking truckers accentuated a selloff in global emerging markets. Despite higher import prices due to the weaker currency, policymakers have repeatedly stressed that foreign exchange moves would drive monetary policy only if they affected inflation more broadly or expectations for price hikes.

Copyright Reuters, 2018