At its 7 March meeting, the Central Bank's Monetary Policy Committee (COPOM, Comite de Politica Monetaria) decided to reduce the SELIC interest rate by 75 basis points to 9.75% in a split 5-2 vote. This was the fifth consecutive meeting in which policymakers opted to cut interest rates, but the first one in which the Central Bank of Brazil (BCB) decided to cut the rate by more than 50 basis points. As a result, the SELIC interest rate entered into single-digit territory for the first time since mid-2010. The move surprised market analysts, who had expected a 0.50% rate cut. COPOM's decision aims to provide a boost for the slowing Brazilian economy. National accounts figures published on 6 March showed that GDP growth slowed down substantially to 2.7% in 2011, well below 2010's 7.5% increase. Monetary authorities expect that a combination of weaker external demand and lower economic growth at home should translate into lower inflationary pressures going forward. In addition, on 15 February, the Brazilian government announced its plans to withhold BRL 55 billion (USD 32 billion) in budget spending in 2012 in order to attain the primary surplus target of 3.0% of GDP, as well as to ease pressure on inflation. Regarding the latter, Finance Minister Guido Mantega explicitly stated that ?the government's fiscal effort should give Brazil's central bank room to continue a cycle of interest rate cuts that began last August.?
Brazil Monetary Policy
Brazil Central Bank cuts SELIC to single digit
March 7, 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.