Brazil Monetary Policy


Central Bank rises SELIC rate unexpectedly in unanimous decision

At its 29 May meeting, the Central Bank's Monetary Policy Committee (COPOM, Comite de Politica Monetaria) decided to raise the benchmark SELIC interest rate by 50 basis points to 8.00%, in a unanimous vote. The decision comes amid mounting price pressures, with inflation reaching the Bank's target ceiling in May, and follows the 0.25% increase announced in April. In addition, the decision surprised the market, which had anticipated only a 25-basis-point rise.

In the brief accompanying statement, policymakers stated that "this decision will contribute to put inflation on a decline and assure that this trend will continue next year". The minutes, including details of the meeting, will be released on 6 June.

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 May 2013

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

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