Photo: The Central Bank in Brasilia. File photograph. Marcello Casal Jr/Agência Brasil — CC BY 3.0 br.
Brazil’s Central Bank cut its benchmark Selic rate by 0.25 percentage point to 13.75% on September 16, the fifth consecutive reduction in the easing cycle. The Copom’s decision was unanimous. It left the pace of any future cuts open, saying the total adjustment would be determined using new information and with the aim of bringing inflation back to target.
The committee’s statement described economic activity as gradually moderating, particularly in sectors sensitive to interest rates, while still resilient overall. It also said inflation had slowed, but the committee raised its 2026 forecast from 5.1% to 5.2% and its 2027 forecast from 3.8% to 3.9%. Its projection for the first quarter of 2028, the relevant policy horizon, remained at 3.2%. Brazil’s continuous inflation target is 3%, with a tolerance band extending to 4.5%.
The cut followed a period when the Selic had stood at 15% from June 2025 to March 2026, its highest level in nearly two decades. Reuters reported that economists overwhelmingly expected the quarter-point cut. The decision was taken at the final Copom meeting before the October presidential election, a politically salient backdrop because Lula had repeatedly criticized the level of interest rates. The Central Bank maintained that future policy would depend on the inflation outlook and incoming data.
The committee said it would assess new data before setting the remaining size of the easing cycle. The next Copom meeting was scheduled for early November.