From the Financial Times:
The spectacular collapse of the real in recent weeks is putting renewed pressure on Brazilian policymakers to hike interest rates once again...
Says Oxford Economics:
There is now a serious risk that Brazil may have to follow Turkey and Russia and increase interest rates very steeply and suddenly.
Brazil's economy has entered a deep recession, which is some brake on inflationary pressures. But with foreign investors dumping Brazilian assets in the face of low growth, weak commodity prices, concerns about policy credibility and the current account deficit at 4% of GDP, Brazil's financial stability is under threat and a major policy shift may be needed to arrest the downward spiral.
We estimate that the depreciation seen over the last three months, if sustained, could see inflation rise above 11% and the policy (SELIC) rate rise to around 18% from the current 14.25%.