On 20 April, the Central Bank Monetary Policy Committee (COPOM, Comite de Politica Monetaria) decided to slow the pace of tightening, raising the SELIC interest rate just 25 basis points to 12.00%. The decision surprised the market, as analysts had expected the Central Bank to hike rates by 50 basis points for a third time since December last year. In fact, the decision was not unanimous, as two of seven members of the COPOM voted for a 50 basis points hike. According to detailed minutes released on 28 April, the Central Bank recognised that the prospective inflation scenario deteriorated since the last meeting, as inflation is quickly approaching the ceiling of the 4.5% target 2.0 percentage points set for this year. That said, the Bank, which had already acknowledged that inflation is likely to exceed the centre of the target this year, stated that the most suitable strategy to bring inflation back to the centre of the target in 2012 is to implement a sufficiently prolonged tightening cycle "starting from this meeting". Accordingly, market participants expect at least another two 25 basis points increases before the COPOM halts the tightening cycle.
Brazil Monetary Policy
COPOM minutes suggest more prolonged tightening cycle to come
April 20, 2011
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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.