- Decision
- Maintain
- Rate change
- 0 bps
- Selic rate
- 15%
Brazil’s Monetary Policy Committee (Copom) left the Selic unchanged at 15.00 % per annum at its 276th meeting, judging the current “significantly contractionary” stance appropriate to steer inflation toward the target amid slower but still-resilient domestic activity and a tight labour market, while headline and core inflation continue to cool yet remain above the goal. After hiking the policy rate by a cumulative 75 bp in May–June 2025, the Committee has kept it at 15 % for five consecutive meetings. Copom notes that Focus survey expectations for 2026 and 2027 stand at 4.0 % and 3.8 %, respectively, above the target, while its own projection for Q3 2027 is 3.2 %. It reiterates that upside risks include prolonged expectations de-anchoring, sticky services prices and a persistently weaker BRL, countered by downside risks from sharper domestic or global slowdowns and lower commodity prices. The external backdrop remains uncertain owing to U.S. policy shifts and heightened geopolitical tension, warranting continued caution by emerging markets. Looking ahead, provided the expected disinflation and policy transmission keep progressing, the Committee anticipates starting a monetary easing cycle at its next meeting but stresses that the pace and magnitude will hinge on data and the need to keep policy “sufficiently restrictive” to ensure convergence.
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.