- Decision
- Maintain
- Rate change
- 0 bps
- selic rate
- 15%
Brazil’s Monetary Policy Committee (Copom) left the Selic rate unchanged at 15.00 % per annum at its 275th meeting, arguing that still-elevated headline and core inflation, de-anchored expectations for 2025-26 (Focus survey: 4.4 % and 4.2 %) and a resilient labour market amid slowing GDP call for a “significantly contractionary” stance maintained for a “very prolonged period” to secure convergence to the target, with Copom’s own IPCA projection at 3.2 % for 2027 Q2. The policy rate has been steady since a 25 bp increase to 15.00 % in June 2025. Copom notes continued high two-sided inflation risks, highlighting potential upside from persistent services inflation, de-anchored expectations and a weaker BRL, and downside from sharper domestic or global slowdowns and softer commodity prices. External conditions remain uncertain owing to US economic policy shifts and heightened geopolitical tensions, reinforcing caution for emerging markets. The Committee reiterates vigilance, stating it will keep the rate at the current level for an extended period and stands ready to tighten again should inflation risks materialise.
Rate evolution
Over the period, the Central Bank of Brazil’s Monetary Policy Committee (Copom) raised the Selic rate by 25 basis points to 15.00% in June 2025, held it there through January 2026, and then cut it in five 25 basis point steps to 13.75% by September 2026, leaving it 100 basis points below where the sequence began. The pause reflected inflation and underlying measures staying above target, deanchored expectations, resilient activity and labor-market pressures despite slower growth, and a cautious response to uncertainty from United States policy, domestic fiscal developments and geopolitics, with inflation risks judged higher than usual on both sides. As inflation and expectations improved late in 2025, Copom shifted from questioning whether a prolonged hold would suffice to judging that strategy appropriate, and in January signalled easing could start at the next meeting if the expected scenario materialised.
Copom then cut five times as prolonged restrictive settings showed transmission to the slowdown in activity, but it continued to flag uncertainty over Middle East conflicts, global financial conditions and monetary policy in some advanced economies. In June 2026, the committee judged the accumulated degree of restriction allowed different rate paths consistent with convergence and that paths ensuring inflation returned to target in the first quarter of 2028 were compatible with smoothing macroeconomic fluctuations, even as first-quarter activity accelerated, the labor market remained resilient, and headline and underlying inflation moved further from target and above its upper bound in the latest reading. After cutting the Selic rate to 14.00% in August as activity moderated and inflation eased, Copom lowered it to 13.75% in September as activity continued to slow while remaining resilient, the labor market stayed tight, and headline and underlying inflation fell below the tolerance interval’s upper limit but remained above target, while deanchored expectations, domestic fiscal developments and elevated two-sided inflation risks with upward asymmetry continued to require caution and an adequately restrictive stance.