The largest ETF tracking Brazilian ETFs has plunged more than 20% the past three months and now the developing economy’s central bank has raised interest rates again in a bid to stem inflation.
Brazil raised its benchmark interest rate to a 16-month high of 9% on Wednesday, maintaining the pace of monetary tightening to fight inflation and rebuild investors’ confidence in Latin America’s largest economy, Reuters reports.
The iShares MSCI Brazil Capped ETF (NYSEArca: EWZ) was fractionally higher in U.S. morning trade Thursday.
Brazil ETFs have been among the worst performers in hard-hit funds that invest in emerging markets and so-called BRIC countries. [Corporate Bond Downgrades Could Pressure Brazil]