News

Brazil Lowers Interest Rate by 25 bps
Brazil’s central bank reduced its benchmark rate to 14.75% in March, less than the expected 50bps reduction, saying a monetary policy calibration cycle is needed as the prolonged hold provided evidence of transmission on the slowdown in economic activity. External factors such as the escalation of geopolitical conflicts in the Middle East and global financial volatility continue to affect emerging markets, while domestically growth is moderating even as the labour market remains resilient and inflation has improved but stays above target. Inflation expectations stand at 4.1% for 2026 and 3.8% for 2027, and Copom projects inflation at 3.3% by the third quarter of 2027. The committee flagged upside risks from persistent services inflation and a more depreciated exchange rate, and downside risks from a more pronounced global slowdown or reduction in commodity prices, judging that this decision remains consistent with converging inflation to target while smoothing the cycle.
Published on 2026-03-18

Brazil Maintains Interest Rate 15%, As Expected
Brazil’s central bank maintained its benchmark rate at 15.00% in January, saying a prolonged hold is needed to keep inflation on a steady path toward the target amid elevated uncertainty. External factors such as US economic conditions and global financial volatility continue to affect emerging markets, while domestically growth is moderating even as the labour market remains resilient and inflation has improved but stays above target. Inflation expectations stand at 4.0% for 2026 and 3.8% for 2027, and Copom projects inflation at 3.2% by the third quarter of 2027. The committee flagged upside risks from persistent services inflation and a weaker exchange rate, and downside risks from a sharper domestic slowdown or falling commodity prices, judging that holding rates for a fairly prolonged period remains consistent with converging inflation to target while smoothing the cycle.
Published on 2026-01-28

Brazil Keeps Interest Rate at 15%, As Expected
Brazil’s central bank maintained its benchmark rate at 15.00% in December, saying a prolonged hold is needed to keep inflation on a steady path toward the target amid elevated uncertainty. External forces such as US economic conditions and global financial volatility continue to feed through to emerging markets, while at home growth is moderating even as the labour market shows resilience and inflation readings have cooled but remain above target. Inflation expectations stand at 4.4% for 2025 and 4.2% for 2026, and Copom projects 3.2% by the second quarter of 2027. The committee flagged upside risks from more persistent services inflation and a weaker exchange rate as well as downside risks from a sharper domestic slowdown or falling commodity prices. It judged that holding the current rate for a fairly prolonged period is consistent with its strategy of converging inflation to target while smoothing the cycle, but said future policy adjustments may be necessary if risks materialize.
Published on 2025-12-10

Brazil Holds Interest Rate 15%, As Expected
Brazil’s central bank opted to maintain its benchmark interest rate at 15% in November, citing the need to keep inflation on a path toward the target amid persistent uncertainty. External factors, including US economic conditions and global financial volatility, continue to influence emerging markets, while domestically, growth is moderating but the labor market still shows dynamism and inflation remains above the target. Inflation expectations for 2025 and 2026 remain elevated at 4.5% and 4.2%, with Copom projecting 3.3% for the second quarter of 2027. The central bank highlighted upside risks such as resilient services inflation and a weaker exchange rate, alongside downside risks like a sharper domestic slowdown or falling commodity prices. Copom emphasized that future policy adjustments may be necessary to maintain price stability. The decision reflects a cautious approach, balancing the need for inflation control with support for economic activity.
Published on 2025-11-05

Brazil Keeps Interest Rate at 15%
Brazil’s central bank opted to maintain its benchmark interest rate at 15% in September, citing the need to keep inflation on a path toward the target amid persistent uncertainty. External factors, including U.S. economic conditions and global financial volatility, continue to influence emerging markets, while domestically, growth is moderating but the labor market remains strong and inflation stays above target. Inflation expectations for 2025 and 2026 remain elevated at 4.8% and 4.3%, with Copom projecting 3.4% for early 2027. The central bank highlighted upside risks such as resilient services inflation and a weaker exchange rate, alongside downside risks like a sharper domestic slowdown or falling commodity prices. Copom emphasized that future policy adjustments may be necessary to maintain price stability. The decision reflects a cautious approach, balancing the need for inflation control with support for economic activity.
Published on 2025-09-17

Brazil Keeps Interest Rate at 15%
Brazil’s central bank opted to maintain its benchmark interest rate at 15% in September, citing the need to keep inflation on a path toward the target amid persistent uncertainty. External factors, including US economic conditions and global financial volatility, continue to influence emerging markets, while domestically, growth is moderating but the labor market remains strong and inflation stays above target. Inflation expectations for 2025 and 2026 remain elevated at 4.8% and 4.3%, with Copom projecting 3.4% for early 2027. The central bank highlighted upside risks such as resilient services inflation and a weaker exchange rate, alongside downside risks like a sharper domestic slowdown or falling commodity prices. Copom emphasized that future policy adjustments may be necessary to maintain price stability. The decision reflects a cautious approach, balancing the need for inflation control with support for economic activity.
Published on 2025-09-17

Brazil Keeps Rates at 15%
The Central Bank of Brazil left its Selic rate steady at 15% in July, maintaining a cautious stance amid persistent inflation and global uncertainty. The decision reflects the Copom commitment to anchoring inflation expectations, which remain above target for 2025 and 2026, at 5.1% and 4.4% respectively. Policymakers cited increased volatility in global financial conditions driven by US fiscal and trade policies, as well as heightened geopolitical tensions. Domestically, economic activity has moderated, though the labor market remains strong, and both headline and core inflation have stayed elevated. Also, Copom emphasized the need for a prolonged period of significantly contractionary policy to steer inflation toward its 3% target. While the committee signaled a pause in its tightening cycle to assess lagging effects, it also reiterated its readiness to resume hikes if inflation pressures persist.
Published on 2025-07-30

Brazil Central Bank Raises Rate to 15%, Signals Possible Pause
The Central Bank of Brazil hiked its Selic rate by 25bps to 15% at its June meeting, citing persistent inflation and unanchored expectations. The Board highlighted a highly uncertain external environment, driven by US trade and fiscal policies and volatile global financial markets, which continue to weigh on emerging economies. Domestically, while economic activity and the labor market remain resilient, recent data show headline and core inflation above target, with expectations for 2025 and 2026 also exceeding the goal. Copom’s projection for 2026 inflation stands at 3.6%, reflecting ongoing inflationary risks, including strong services inflation, policy-driven exchange rate pressures, and unanchored long-term expectations. The committee signaled this may be the last hike in the current cycle, pending a reassessment of the lagging effects of past tightening. However, Copom emphasized its readiness to adjust policy further if inflation does not converge toward target.
Published on 2025-06-18

Brazil Central Bank Raises Rate to 15%, Signals Possible Pause
The Central Bank of Brazil hiked its Selic rate by 25bps to 15% at its June meeting in response to persistent inflation and unanchored expectations. The Board noted that external environment remains highly uncertain, particularly due to US trade and fiscal policies and global asset volatility, which continue to pressure emerging markets. Domestically, while economic activity and the labor market remain resilient, recent data show headline and core inflation above target, with expectations for 2025 and 2026 also exceeding the goal. Copom’s projection for 2026 inflation stands at 3.6%, reflecting ongoing inflationary risks, including strong services inflation, policy-driven exchange rate pressures, and unanchored long-term expectations. The committee signaled this may be the last hike in the current cycle, pending a reassessment of the lagging effects of past tightening. However, Copom emphasized its readiness to adjust policy further if inflation does not converge toward target.
Published on 2025-06-18

Brazil Raises Rate by 50 bps
The Central Bank of Brazil raised its Selic rate by 50bps to 14.75% in May 2025, aiming to bring inflation closer to the target. While its primary goal is price stability, the decision also seeks to reduce economic fluctuations and support full employment. Economic activity and labor market indicators continue to show dynamism, though growth is moderating and both headline and underlying inflation remain above target. Market inflation forecasts for 2025 and 2026, as determined by the Focus survey, remain above the target at 5.5% and 4.5%, respectively, while Copom’s inflation projection for 2026 stands at 3.6% in the reference scenario. The Committee remains cautious and ready to adjust its policy as conditions evolve. The external environment remains adverse and particularly uncertain, especially due to US trade policy, which is fueling concerns about the magnitude of the global economic slowdown, heterogeneous effects on inflation and conduct of monetary policy.
Published on 2025-05-07

Brazil's Central Bank Hikes Selic by 100 bps to 14.25%
The Central Bank of Brazil raised its Selic rate by 100 bps to 14.25% in March 2025, aiming to bring inflation closer to the target. While its primary goal is price stability, the decision also seeks to reduce economic fluctuations and support full employment. The external environment remains challenging, particularly due to uncertainty over US trade policy, which has raised concerns about economic slowdown, disinflation, and the Fed's stance. Central banks of major economies continue to focus on converging inflation rates to their targets despite labor market pressures. Domestically, economic and labor market indicators show dynamism, though growth is moderating. Inflation expectations for 2025 and 2026 have risen significantly to 5.7% and 4.5%, respectively. The Committee remains cautious and ready to adjust its policy as conditions evolve.
Published on 2025-03-19

Brazil Raises Rate by 100 bps, As Expected
The Central Bank of Brazil raised its Selic rate by 100 bps to 13.25% in its January 2025 meeting, confirming its previous signal of further tightening if inflation risks persist. The bank indicated that another 100bps hike is expected in the March meeting, should inflationary pressures remain, particularly from both domestic and external challenges. Economic activity and labor market indicators remain strong, although both headline and core inflation measures persistently exceed target levels. Inflation expectations for 2025 and 2026 have risen significantly, now standing at 5.5% and 4.2%, respectively. The Committee highlighted upward risks, including the potential for unanchored inflation expectations, resilient services inflation, and a more depreciated exchange rate, all of which warrant further tightening. At the same time, the Committee acknowledged downside risks related to a sharper-than-expected slowdown in domestic economic activity.
Published on 2025-01-29

Brazil Hikes Rate by 100 bps
The Central Bank of Brazil raised its Selic rate by 100 bps to 12.25% in its December 2024 meeting, with plans for further tightening if inflation risks persist, particularly given adverse external and internal factors that continue to affect inflation projections and expectations. Officials emphasized that their decision was essential to achieving inflation targets, promoting economic stability, and supporting full employment. Domestically, economic activity and labor market indicators remain robust, with the third-quarter GDP report showing an expanding gap. Inflation, both headline and core measures, continues to exceed target levels, leading to revised inflation expectations for 2024 and 2025, now projected at 4.8% and 4.6%, respectively. The Board also noted that the external environment remains challenging, primarily due to uncertainties surrounding the US economic outlook, which raises concerns about the pace of slowdown, disinflation, and the Federal Reserve's policy stance.
Published on 2024-12-11

Brazil Raises Rate by 50 bps
The Central Bank of Brazil hiked its Selic rate by 50 bps to 11.25% in its November 2024 meeting, aiming to bring inflation back to target and support economic stability. The Committee highlighted risks of higher inflation, driven by persistent inflation expectations, resilient services inflation, and both domestic and global economic policies. On the downside, a sharper global slowdown and stronger-than-expected disinflation are key concerns. Domestically, while economic activity and the labor market remain robust, inflation has recently exceeded targets. Inflation expectations for 2024 and 2025 are 4.6% and 4.0%, respectively, with the Copom's projection for Q2 2026 at 3.6%. Policymakers indicated that future rate adjustments will depend on inflation trends and evolving risk factors.
Published on 2024-11-06

Brazil Hikes Rate by 25 bps
The Central Bank of Brazil raised its Selic rate by 25 bps to 10.75% in its September 2024 meeting, as expected. The move aligns with the goal of converging inflation toward the target while smoothing economic fluctuations, considering the resilient economy, labor market pressures, positive output gap, and rising inflation projections. Domestically, economic activity and labor market indicators have been stronger than expected, prompting a reassessment. Inflation, as measured by IPCA and underlying measures, remains above target. Inflation expectations for 2024 and 2025 are around 4.4% and 4.0%, respectively, while the projection for early 2026 stands at 3.5%. Policymakers mentioned future interest rate adjustments will depend on inflation dynamics, projections, expectations, and the balance of risks.
Published on 2024-09-18

Brazil Extends Rate-Cutting Pause in July
The Central Bank of Brazil maintained its Selic rate at 10.50% in its July 2024 meeting, aligning with expectations of an extended pause of the rate-cutting cycle amid an uncertain external environment concerning US monetary policy and global inflation dynamics. Despite labor market pressures, domestic economic indicators have demonstrated greater dynamism than anticipated. Current inflation expectations for 2024 and 2025 are approximately 4.1% and 4.0%, respectively, while Copom's projections for early 2026 stand at 3.4% if the Selic rate remains unchanged. The Committee highlighted risks such as unanchored inflation expectations and robust services inflation, alongside potential downside risks from a global economic slowdown. This unanimous decision seeks to preserve price stability and bolster economic activity while committing to monitoring the effects of fiscal policies on monetary policy.
Published on 2024-07-31

Brazil Halts Rate-Cutting Cycle in June, Leaves Rate at 10.5%
The Central Bank of Brazil kept its key Selic rate at 10.5% in its June meeting, in line with expectations, amid a challenging global environment marked by uncertainty over US monetary policy and global inflation trends. Domestically, economic indicators showed unexpected resilience, with consumer inflation trending downwards while core inflation remains above target. Inflation expectations for 2024 and 2025 are 4.0% and 3.8%, respectively, with Copom projecting 4.0% and 3.4% for the same periods. The Committee highlighted risks such as persistent global inflation pressures and resilient services inflation, alongside potential global economic slowdown. Copom stresses the importance of cautious monetary policy given uncertain domestic and international conditions, emphasizing the role of credible fiscal policy in anchoring inflation expectations and reducing financial risk. The decision was unanimous, easing markets concerns of political divergence within the Copom.
Published on 2024-06-19

Brazil Cuts Rates by 25 bps
The Central Bank of Brazil lowered its key Selic rate by 25 basis points to 10.5% in its May meeting, in line with expectations. This decision reflects global uncertainties and a domestic environment of strong economic activity and unanchored inflation expectations. The committee stressed the need for cautiousness, considering the evolution of disinflation, different scenarios, risk balances, and a wide range of information. Domestically, economic indicators and the labor market have shown more dynamism than expected. While headline inflation has been decreasing, underlying inflation measures have surpassed the target in recent releases. The Copom's inflation projections are 3.8% for 2024 and 3.3% for 2025. Policymakers highlighted that future interest rate adjustments will be based on a commitment to achieve inflation convergence to the target.
Published on 2024-05-08

Brazil Reduces Rates by 50 bps, As Expected
The central bank of Brazil reduced its key Selic rate by 50 bps to 10.75% in its March meeting, in line with expectations. The Committee observed the current external environment remains volatile, characterized by ongoing debates surrounding the initiation of monetary policy easing in major economies and the pace of inflation decline globally. Domestically, economic activity indicators aligned with the Copom's anticipated slowdown scenario. Although headline consumer inflation shows a disinflation trend, underlying inflation measures exceeded the target in recent releases. Copom projects 3.5% and 3.2% inflation for 2024-25. They cut the interest rate to aid convergence to target inflation and stabilize economic activity. The Committee underscores the need for fiscal targets to anchor inflation expectations and plans further reduction if the current scenario persists, aiming for prudence and moderation in monetary policy amidst global uncertainties.
Published on 2024-03-20

Brazil Lowers Rates by 50 bps, As Expected
The central bank of Brazil reduced its key Selic rate by 50 bps to 11.25% in its January meeting, in line with expectations. The Committee observed that economic activity indicators align with the anticipated economic slowdown. Consumer headline inflation continues on a disinflationary path, and inflation expectations for 2024 and 2025, according to the Focus survey, stand at around 3.8% and 3.5%, respectively. Committee members unanimously anticipate a similar reduction in the upcoming meetings, deeming it the appropriate pace to sustain the necessary contractionary monetary policy for the disinflationary process. The Committee underscores that the total easing cycle's magnitude over time hinges on factors such as inflationary dynamics, long-term expectations, inflation projections, the output gap, and the balance of risks.
Published on 2024-01-31