Brazil’s central bank left interest rates unchanged at 13.75% on Wednesday, noting that inflation “remains high” despite falling three straight months ahead of a presidential election.

It’s the second consecutive meeting that the bank’s monetary policy committee left the Selic interest rate unchanged after braking on 12 straight hikes.

In a statement, the Monetary Committee said it remained “vigilant” and would maintain high interest rates “as long as it takes to control inflation”.

The committee did not rule out a “resumption of the hike cycle” if prices do not fall “as expected”. For now, “inflation remains high” despite having been declining for several months.

The decision comes as the country braces for a contentious second round of presidential elections between far-right President Jair Bolsonaro and left-wing former leader Luiz Inacio Lula da Silva on Sunday.

The interest rate decision corresponded to market forecasts that were reflected in a survey of more than a hundred consultants and financial institutions by the business newspaper Valor.

The reference interest rate has remained at the same level since August, when the committee last made the half-point increase.

Brazil, which has been plagued by a history of hyperinflation, was among the first countries to start raising interest rates following the coronavirus pandemic’s monetary easing, when the Selic was at a record low of 2 percent.

Since March 2021, the central bank had raised its key interest rate rapidly from an all-time low of 2 percent, including three whopping 1.5 percentage point hikes from October 2021 to February 2022.

Long-standing high inflation in Latin America’s largest economy has been fueled by rising global food and oil prices spurred by the war between Russia and Ukraine.

This trend has slowed in recent months.

The consumer price index was negative in July (-0.68 percent), August (-0.36 percent) and September (-0.29 percent).

Annual inflation was 7.17 percent in September ahead of the first round of presidential elections on October 2.

The successive declines reduced market forecasts and inflation is now expected to fall to 5.60 percent by the end of the year, almost half of what was initially forecast, according to a survey released this week by the Central Bank (BCB).

Bolsonaro has highlighted “unprecedented deflation” during his campaign.

He is currently at 45 percent versus Lula’s 49 percent ahead of the second round, according to Datafolha polling data released on Friday.

However, economists warn that the negative trend is not yet established and price increases are still a latent threat.

By keeping the Selic at the current high level, the Monetary Committee hopes inflation will fall to the 3.25 percent target set by the central bank by 2023.

Only then can they start cutting rates, analysts say.

Analysts have warned of the impact of high interest rates on GDP, which is expected to grow 2.76 percent by the end of this year, far from the stagnation expected in early 2022, according to the BCB Focus survey.

Brazil cuts its interest rate as the US Federal Reserve and European Central Bank moved into full tightening to curb inflation.