Brazil’s central bank on Wednesday kept its benchmark interest rate at 15% for the fifth time in a row as it worked to tamp down inflation in Latin America’s largest economy.
The decision by the Monetary Policy Committee (Copom) was made due to a “still uncertain external environment,” the bank said in a statement.
The rate, known as the Selic, remains at its highest level since July 2006 — though the bank anticipated it would begin a “flexibilisation” of its monetary policy at its next meeting in March.
Wednesday’s decision marks a blow to the administration of leftist President Luiz Inacio Lula da Silva, who has repeatedly called for rate cuts since returning to power in 2023. He previously served from 2003 to 2010.
Instead, Brazil’s central bank raised the benchmark interest rate seven consecutive times between September 2024 and June 2025, leaving it unchanged since July of last year.
The decision comes the same day as the US Federal Reserve also held its benchmark interest rate, despite pressure from President Donald Trump for cheaper money.
Inflation for Brazil in 2026 and 2027 remains “above the target” of three per cent, the central bank said, adding that it will “monitor the impacts of the geopolitical context” on price increases.
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Trump imposed a 40 per cent tariff on Brazilian exports to the United States in August before the price of coffee — a key product of the Latin American country — began to spike.
Those tariffs were largely lifted in November, after Trump met with Lula.
AFP
