The Central Bank of Brazil’s Monetary Policy Committee (Copom) cut the Selic rate by 25 basis points to 14.00% in August, judging the move consistent with inflation convergence amid gradually moderating but resilient activity, deanchored expectations and unusually high, upside-skewed inflation risks. Over the past year, Copom held the rate at 15.00% through January before making four consecutive 25-basis-point cuts from March. Headline inflation slowed but remained above the target’s upper limit, while underlying measures eased to slightly below that limit; Focus survey expectations stood at 5.0% for 2026 and 4.2% for 2027, and Copom projected inflation at 3.2% in the first quarter of 2028. The labor market remained heated. The external environment remained uncertain because of armed conflicts in the Middle East and monetary policy uncertainty in some advanced economies, contributing to greater asset and commodity price volatility. Copom said it would determine the total scale of the calibration cycle in light of new information and maintain sufficient restriction to ensure inflation converges to target.
Central Bank of Brazil2026-08-04
Central Bank of Brazil Cuts Selic Rate by 25 Basis Points to 14.00%
The Central Bank of Brazil’s Monetary Policy Committee cut the Selic rate by 25 basis points to 14.00% in August, its fourth consecutive reduction, while noting deanchored expectations and unusually high, upside-skewed inflation risks. It will calibrate further easing based on new data while maintaining sufficient restriction to ensure inflation converges to target.