Central Bank of Brazil

October 25, 2017

Brazil’s monetary policy committee, Copom, has undertaken the ninth interest rate reduction in the past twelve months, reducing its Selic Rate by 75 basis points to 7.5%. The previous four cuts were by a full percentage point each, and the Selic Rate prior to these nine reductions stood at 14.25%.  Earlier, 325 basis points of rate reduction were implemented between July 2014 and July 2015. The Selic Rate is now 10 percentage points lower than it was at mid-2014.

In a released statement late today, Copom indicated that today’s decision had been taken unanimously. A favorable inflation environment meeting target is expected to continue, and the economic recovery is assumed to persist. If economic trends evolve as the authorities anticipate, more rate easing will follow. “Regarding the next meeting, provided the Committee’s baseline scenario evolves as expected, and taking into account the stage of the monetary easing cycle, at this time the Copom views a moderate reduction of the pace of easing as appropriate. The Copom emphasizes that the monetary easing process will continue to depend on the evolution of economic activity, the balance of risks, possible reassessments of the extension of the cycle, and on inflation forecasts and expectations.”

Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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