Brazil Monetary Policy


Central Bank slows pace of SELIC rate hikes

At its 26 February 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 10.75% in a unanimous vote. The increase matched market expectations. The decision to push borrowing rates up came amid ongoing concerns over inflationary pressures, but broke the streak of six consecutive 50-basis-point hikes.

In the Bank's brief accompanying statement, policymakers stated that the move provides a continuation to the adjustment process that began in April of 2013. The bank did not rule out the possibility of another hike at the next meeting in April, although analysts have interpreted the decision to increase the benchmark rate by 25 basis points rather than by 50 basis points as a sign that the tightening cycle may be near its end. Brazil's monetary authorities are concerned about inflationary pressures, but they are also struggling to revive economic growth.

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%.

Author:, Economist

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Brazil Monetary Policy Chart

Brazil Monetary Policy February 2014

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

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