The city on the beach in Brazil

Brazil Monetary Policy March 2023

Brazil: COPOM stays put for fifth consecutive meeting in March

At its 21–22 March meeting, the Monetary Policy Committee (COPOM) of Brazil’s Central Bank (BCB) decided to maintain the benchmark SELIC interest rate unchanged at 13.75% once again. The unanimous decision, which had been priced in by markets, was the fifth consecutive hold since September 2022.

The decision to hold was driven by the continued cooling of both headline and core inflation through February. Meanwhile, high-frequency data continued to confirm the expected domestic economic deceleration, while the BCB also mentioned increased uncertainty and volatility, especially due to the recent banking turmoil in Europe and the U.S. Consequently, the Bank maintained its wait-and-see approach to continue assessing the impact of its cumulative 1,175 basis points worth of increases from March 2021 to August 2022.

The Bank did not provide hints about future policy moves in its communiqué, but its tone remained largely unchanged from recent meetings. It stated that risks to the inflation outlook remain in both directions and that it remains committed to “persevere until not only the disinflation process is consolidated, but also inflation expectations anchor close to the target”. The COPOM acknowledged that headline inflation expectations have deteriorated; they were upwardly revised to 5.8% and 3.6% for 2023 and 2024, respectively. As such, it stated it would resume its policy tightening if needed. Meanwhile, virtually all of our panelists see the benchmark SELIC rate being cut in 2023.

The next monetary policy meeting is scheduled for 2–3 May.

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest