Brazil's Central Bank keeps the benchmark interest rate unchanged at 15%
The Central Bank of Brazil has announced that it will keep the Selic interest rate unchanged at 15% annually. This decision was made during the Central Committee (Copom) meeting, despite a recent easing of inflation.
Inflation in August was 5.13%, a slight drop from the previous month's 5.23%. This marks the eighth consecutive month that inflation has remained outside the official tolerance band of 1.5% to 4.5%.
The Copom has been vigilant in assessing whether the current interest rate level is sufficient to bring inflation within the target range. The committee will continue to monitor the economic scenario, exercising caution in its monetary policy.
The Brazilian government believes that Trump's tariffs could increase food supply in the domestic market and moderate prices. However, the impact of these tariffs on inflation is yet to be fully understood.
Unemployment in the country also saw a significant decrease, with the May-June quarter recording a rate of 5.6%, the lowest in 13 years.
Despite the current economic conditions, leftist President Luiz Inácio Lula da Silva has urged the Central Bank to reduce the interest rate to stimulate the Brazilian economy. However, the Copom has not made any new changes or decisions regarding the interest rate.
The Copom is also keeping a close eye on the decisions of the U.S. Federal Reserve, which recently cut its benchmark interest rate. The Central Bank of Brazil is expected to change the Selic interest rate for the first time since July 2025 at its meeting in October 2025. The Copom is likely to decide whether to raise, lower, or keep the rate unchanged based on the current economic conditions.
Experts and financial institutions surveyed by the Central Bank of Brazil expect inflation to reach 4.83% in 2025. The Focus survey did not indicate any expected changes in the Selic rate for the rest of the year.
The Selic rate has been at 15% since July, and it is expected to remain at this level until the end of the year, according to the surveyed experts and financial institutions.
In conclusion, the Central Bank of Brazil has kept the Selic interest rate unchanged at 15% annually, as inflation dips slightly. The Copom will continue to monitor the economic scenario and assess whether the current interest rate level is sufficient to bring inflation within the target range. The Copom is also keeping a close eye on the decisions of the U.S. Federal Reserve.
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