Brazil Monetary Policy


Central Bank rises SELIC rate again in April

At its 2 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 11.00% in a unanimous vote. The increase matched market expectations. The decision to push borrowing rates up came amid ongoing concerns over supply-side related inflationary pressures, especially stemming from higher food prices. The Bank did not provide a detailed accompanying statement as it did in previous releases. However, most analysts interpreted the recent slowdown in the pace of monetary tightening-last month the rate was increased by 25 basis points after six consecutive months of 50 basis points hikes-as a signal that the Bank intends to bring this cycle to an end. LatinFocus Consensus Forecast participants see the SELIC rate ending 2014 at an average of 10.51%. Panelists see the SELIC rate ending 2015 at an average of 11.21%.


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Brazil Monetary Policy Chart

Brazil Monetary Policy March 2014

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

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