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Brazil Interest Rate

Brazil Interest Rate

SELIC Rate in Brazil

Brazil's central bank policy rates fluctuated significantly over the last decade, mirroring the country's economic challenges. Rates were initially high due to inflation concerns but were cut to historic lows during the pandemic to stimulate growth. Post-2020, rates were again increased in response to rising inflation and economic recovery needs, with the Central Bank beginning another easing cycle midway through 2023 as concerns over prices dimmed. Conditions changed towards end-2024, with the Bank once more jacking up rates to ward off stubborn price pressures.

The SELIC Rate ended 2022 at 13.75%, up from the 9.25% end-2021 value and up from the reading of 10.00% a decade earlier. For reference, the average policy rate in Latin America was 18.90% at end-2022. For more interest rate information, visit our dedicated page.

Brazil Interest Rate Chart

Note: This chart displays Policy Interest Rate (%) for Brazil from 2014 to 2024.
Source: Macrobond.

Brazil Interest Rate Data

2020 2021 2022 2023 2024
SELIC Rate (%, eop) 2.00 9.25 13.75 11.75 12.25
10-Year Bond Yield (%, eop) 6.90 10.83 12.66 10.36 15.21

Central Bank slows pace of its tightening cycle in May, as expected

Central Bank hikes rates to near 20-year high: At its 6–7 May meeting, the Monetary Policy Committee (COPOM) of the Central Bank of Brazil (BCB) increased its SELIC rate by 50 basis points to 14.75%—the highest level in nearly two decades. The rise, which followed March’s 100 basis point hike, marked a slowdown in the tightening pace and brought the cumulative hikes to 425 basis points since the current tightening cycle started in September 2024. The decision was once again unanimous and had been largely priced in by markets, as the Bank stuck to the forward guidance from its March meeting.

Above-target inflation and unanchored inflation expectations drive additional hike: The key driver of the hike remained above-target price pressures, with both headline and core inflation metrics remaining above the BCB’s 1.5–4.5% tolerance band. Moreover, inflation expectations remain unanchored. Still, the inflation outlook improved; the BCB cut its inflation projections for 2025 to 4.8% from its March projection of 5.1%, respectively. This, coupled with the small deceleration in GDP growth seen recently, likely led to the less aggressive interest rate increase.

Forward guidance is left open-ended, but tightening cycle nears its end: The Bank said it would be cautious about future monetary policy moves, as it stated risks to the inflation outlook remain higher than usual. Accordingly, the Bank did not provide explicit forward guidance this time and left future policy moves open-ended. It stated that it first needs to carefully assess the impact of the ongoing tightening cycle and of the current elevated economic uncertainty on the real economy. Moreover, the government’s fiscal policy remains a key factor to monitor due to its effect on domestic demand. Over half of our panelists expect a final 25–50 basis point increase when the Bank reconvenes next on 17–18 June. Our Consensus is then for some mild reductions by December.

Consensus Forecasts and Projections for the next ten years

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Brazilian interest rate projections for the next ten years from a panel of 30 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for Brazilian interest rate.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Brazilian interest rate projections.

Want to get access to the full dataset of Brazilian interest rate forecasts? Send an email to info@focus-economics.com.

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