At its 18 April meeting, the Central Bank's Monetary Policy Committee (COPOM, Comite de Politica Monetaria) decided to reduce the benchmark SELIC interest rate by 75 basis points to 9.00% in a unanimous vote. This was the sixth consecutive meeting in which policymakers opted to cut interest rates and the second one in which the Central Bank decided to cut the rate by 75 basis points. As a result, the SELIC interest rate now sits only a notch above the historic low of 8.75% last seen two years ago. The move was in line with market expectations. According to the minutes released on 26 April, the Central Bank argued that given the amount of policy stimulus implemented thus far, any additional monetary easing should be conducted with caution, suggesting that the Bank may adopt a more pragmatic "wait-and-see" approach in the coming months. In addition, policy makers stated that household consumption will remain robust going forward, driven by income growth and an expansion of credit. Regarding price developments, the Bank stated that inflation remains in a downward trend and projects inflation to settle within the target range this year and next. Meanwhile, on 3 May, Finance Minister Guido Mantega announced new rules for savings accounts, widely known as the poupanca, to provide the Central Bank with more room to continue reducing interest rates. The new rule states that returns on new savings accounts will now pay 70% of the SELIC rate plus a fluctuating reference rate (TR, Taxa Referencial), once the SELIC interest rate falls below the 8.50% level.
Brazil Monetary Policy
Central Bank cuts SELIC rate to 9.00%
April 18, 2012
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Brazil Economic News
October 19, 2016
At its 19 October meeting, the Central Bank’s Monetary Policy Committee (COPOM, Comite de Politica Monetaria) decided to cut the benchmark SELIC interest rate for the first time in four years, lowering it from 14.25% to 14.00%.
October 18, 2016
Retail sales (excluding cars and construction) fell 0.6% in August from the previous month in seasonally-adjusted terms.
October 7, 2016
Consumer prices in September increased 0.08% over the previous month, the lowest rise since July 2014.
October 4, 2016
In August, industrial production plunged 3.8% over the previous month in seasonally-adjusted terms, which significantly contrasted the 0.1% expansion recorded in July and marked the worst result since January 2012.
October 3, 2016
The Markit manufacturing Purchasing Managers’ Index (PMI) rose slightly in September, increasing from August’s 45.7 to 46.0.