Brazil's central bank has cut rates again. The Comitê de Política Monetária (Copom, the Monetary Policy Committee) of the Banco Central do Brasil lowered the Selic rate by 0.25 percentage point on Wednesday (16), from 14% to 13.75% a year. It was the fifth consecutive cut of the same size, and the decision was unanimous among the committee's seven members, chaired by Gabriel Galípolo.
The move was expected by the market. Analysts were less focused on the cut itself than on the message about what comes next — and the statement avoided giving clues.
What the statement says
The Copom said that "the total magnitude of the calibration cycle will be established in light of new information", without committing to further reductions. It repeated that the moment "demands serenity and caution" and judged that inflation risks "remain higher than usual, with an upward asymmetry" — meaning an upside surprise is more likely than a downside one.
On the external front, the committee cited uncertainty over the armed conflicts in the Middle East and over monetary policy in some advanced economies. Economists point to higher interest rates in the United States as one of the factors that could limit room for further cuts in Brazil.
The numbers behind the decision
- August IPCA (consumer inflation): deflation of 0.32%
- 12-month inflation: 4.22%, below the ceiling of the target range (4.5%)
- Central bank projection for the relevant horizon (first quarter of 2028): 3.2%
- Focus market survey: inflation of 4.9% in 2026 and 4.3% in 2027
According to the statement, both headline inflation and the average of core measures slowed and stood below the upper limit of the tolerance range. That relief opened room for another cut even as economic activity loses steam: the IBC-Br, the central bank's activity index seen as a proxy for GDP, fell 0.2% in July.
What to expect
The prevailing view among economists quoted in the press is that the Selic may stay at 13.75% until the end of the year, although part of the market sees room for more cuts. Even after five reductions, the benchmark rate remains high, which keeps credit expensive for households and businesses.
Reporting from InfoMoney, O Tempo, Metrópoles and Agência Brasil.
