Interest Rate in Brazil

Brazil - Interest Rate
COPOM hikes rates for tenth consecutive time in May; brings SELIC rate to early 2017 levels
At its 3–4 May meeting, the Monetary Policy Committee (COPOM) of Brazil’s Central Bank (BCB) unanimously decided to raise the benchmark SELIC interest rate by a further 100 basis points—as was largely expected by markets—bringing it to 12.75%. The move, which marked the tenth consecutive hike, pushed the rate to its highest level since January 2017, and amounting to a total 1,075 basis points of rate increases since the tightening cycle began in March 2021.
The decision to further tighten its monetary stance reflected the Bank’s efforts to rein in stubborn increases in inflation stemming from Covid-19-related lockdowns in China and the war in Ukraine—which have exacerbated supply chain disruptions—as well as the tightening of global financial conditions. The Bank upwardly revised its end-2022 inflation forecast to 7.3% (previously projected: 7.1%) and kept the forecast for the end of 2023 unchanged at 3.4%. Meanwhile, underlying inflation continues to lie well above the Bank’s targets of 3.50% and 3.25% for 2022 and 2023, respectively. That said, COPOM sees risks to the inflationary outlook in both directions: a reversal of the commodity price boom and a sharper-than-expected deceleration of economic activity would exert downward pressure on inflation, while persistently high global inflation and uncertainty over the country’s fiscal trajectory—which could increase risk premiums—would push up price pressures.
With regard to forward guidance, the Committee stated in its communiqué that “given its inflation projections and the risk of a deanchoring of long-term expectations, it is appropriate to continue advancing in the process of monetary tightening significantly into even more restrictive territory. The Committee emphasizes that it will persist in its strategy until the disinflation process consolidates and anchors expectations around its targets”. Consequently, the Bank now hinted at an extension of the tightening cycle, with another adjustment in the next meeting, albeit smaller in size. Accordingly, virtually all of our panelists have penciled in a 50–75 basis point increase in Q2.
The next monetary policy meeting is scheduled for 14–15 June.
FocusEconomics panelists project the SELIC rate to end 2022 at 12.95% and 2023 at 8.98%.
Brazil - Interest Rate Data
2015 | 2016 | 2017 | 2018 | 2019 | |
---|---|---|---|---|---|
Policy Interest Rate (%) | 14.25 | 13.75 | 7.00 | 6.50 | 4.50 |
Brazil Interest Rate Chart

Source: Central Bank of Brazil.
Brazil Facts
Value | Change | Date | |
---|---|---|---|
Bond Yield | 6.79 | -0.82 % | Dec 31 |
Exchange Rate | 4.02 | -0.13 % | Jan 01 |
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Economic News
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Brazil: Retail sales growth loses pace in March
May 10, 2022
Retail sales increased 1.0% month-on-month in seasonally-adjusted terms in March (February: +1.3% mom).
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Brazil: COPOM hikes rates for tenth consecutive time in May; brings SELIC rate to early 2017 levels
May 4, 2022
At its 3–4 May meeting, the Monetary Policy Committee (COPOM) of Brazil’s Central Bank (BCB) unanimously decided to raise the benchmark SELIC interest rate by a further 100 basis points—as was largely expected by markets—bringing it to 12.75%.
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Brazil: Industrial output growth deteriorates in March
May 3, 2022
Industrial production increased 0.3% month-on-month in seasonally-adjusted terms in March (February: +0.7% s.a.
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Brazil: Manufacturing PMI eases in April; conditions still improve
May 2, 2022
The S&P Global Manufacturing Purchasing Managers' Index (PMI) came in at 51.8 in April, down from March's 52.3.
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Brazil: Economic activity bounces back in February
May 2, 2022
Economic activity increased 0.3% in month-on-month seasonally-adjusted terms in February, which contrasted January's 0.7% decrease.