Brazil central bank’s strategy to keep interest rates high for a prolonged period will be put to the test by the 50% tariffs Donald Trump is expected to slap on the country as soon as this week.

Brazil central bank signalled on Tuesday it is sticking to a cautious monetary policy stance as it faces the possible fallout from steep new US tariffs

Brazil's central bank on Tuesday flagged caution over the impact of steeper U.S. trade tariffs, reaffirming its commitment to a policy stance aimed at lowering inflation expectations after signaling interest rates will remain on hold for long.

Brazil’s central bank said it will keep a cautious stance on monetary policy as it works to tame above-target inflation, warning of increased uncertainty caused by US President Donald Trump’s trade tariffs.