The Central Bank of Brazil’s Monetary Policy Committee (Copom) cut the Selic rate to 14.25% per year in June 2026, saying inflation projections have moved further away from target over the relevant horizon even as uncertainty has risen markedly, while the prolonged period of restrictive rates has shown evidence of slowing activity and allows different interest-rate paths consistent with disinflation. Copom said current conditions justify continuing its calibration cycle, with the total magnitude of that cycle to be determined by incoming information to ensure inflation converges to target. Domestically, activity accelerated in the first quarter, with cyclical sectors regaining importance and the labor market still resilient, although current indicators remain consistent with a deceleration over 2026; headline inflation and underlying measures accelerated further and exceeded the upper limit of the target range in the latest reading. Focus survey inflation expectations for 2026 and 2027 stood at 5.30% and 4.10%, respectively, while Copom’s reference-scenario projection for the Broad Consumer Price Index (IPCA) was 3.7% in the fourth quarter of 2027. Externally, the committee said uncertainty remains high because of unresolved terms for ending armed conflicts in the Middle East and the effects already seen on global financial conditions, requiring caution from emerging economies amid higher volatility in asset and commodity prices. Copom also cited upside risks from de-anchored
Central Bank of Brazil2026-06-17
Central Bank of Brazil Cuts Selic Rate to 14.25%
The Central Bank of Brazil’s Monetary Policy Committee cut the Selic rate to 14.25% a year in June 2026, saying that although inflation projections have moved further from target and uncertainty has increased, the prolonged period of restrictive rates is showing signs of slowing activity and supports continued policy recalibration. Copom said the total magnitude of the cycle will depend on incoming data, with inflation still above the upper limit of the target range and external risks elevated by Middle East-related uncertainty and tighter global financial conditions.