The Central Bank of Brazil held the Selic rate at 13.75% a year, citing higher inflation expectations, increased uncertainty and a sharper domestic slowdown, following reductions from the 15.00% level held in November 2025 to the current level in September 2026. Headline inflation and average underlying measures accelerated above the upper limit of the target tolerance band, while Focus survey inflation expectations for 2026 and 2027 moved further from target to 5.2% and 4.8%, respectively. The central bank’s reference-scenario inflation projection rose to 3.5% for the second quarter of 2028, its relevant policy horizon, incorporating recent supply shocks and using the survey’s interest-rate path. Economic activity slowed more sharply, particularly in cyclical sectors, while the labor market remained resilient but showed signs of cooling. The external environment became more adverse as prolonged Middle East conflicts pushed up oil and petroleum-product prices and advanced economies pursued more restrictive monetary policy. With inflation risks elevated and tilted to the upside, the central bank stressed caution and said it would monitor developments to maintain sufficient monetary restraint to ensure inflation converges to target.
Central Bank of Brazil Holds Selic Rate at 13.75%
The Central Bank of Brazil held the Selic rate at 13.75% a year, citing rising inflation expectations, increased uncertainty and a sharper domestic slowdown. With inflation risks elevated and tilted to the upside, it stressed caution and maintaining sufficient monetary restraint to ensure inflation converges to target.