Bank of Brazil

June 4, 2015

In an expected though controversial move contrary to the wish of government officials, Copom, the Bank of Brazil’s monetary policy committee, raised the Selic interest rate to 13.75% from 13.25%.  This was the fourth 50-basis point increase of 2015 and the sixth tightening since late October 2014.  13.75% is the highest Selic rate level since January 2009.  Brazil is in deep recession, yet CPI inflation of slightly more than 8% is at a decade-plus high and over 1.5 percentage points above the target ceiling of 6.5%.  Officials seek to reduce inflation to the 4.5% target midpoint by the end of next year and have also expressed displeasure with upwardly creeping expected inflation.

Copyright 2015, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.


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