Brazil Monetary Policy


Central Bank hikes SELIC rate amidst inflation concerns

At its 17 April meeting, the Central Bank's Monetary Policy Committee (COPOM, Comite de Politica Monetaria) decided to raise the benchmark SELIC interest rate by 25 basis points to 7.50%, in a split 6-2 vote. The decision comes amid mounting price pressures, with inflation breaching the Bank's target ceiling in March, and represents the first hike in the policy rate since July 2011. That said, the decision was in line with market expectations.

In the brief accompanying statement, policymakers justified their decision citing high inflation and the dispersion of price increases. At the same time, the Committee confirmed that the uncertainty regarding Brazil's economic recovery prevails. Hence, the Bank concluded that any further monetary policy actions should be considered carefully. The minutes, including details of the meeting, will be released on 25 April.

LatinFocus Consensus Forecast participants see the SELIC rate ending this year at 8.03%. For 2014, panellists see the SELIC rate rising to 8.27%.


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Brazil Monetary Policy Chart

Brazil Monetary Policy April 2013

Note: SELIC target rate (Taxa SELIC meta) in %.
Source: Central Bank of Brazil (Banco Central do Brasil).

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