Central Bank of Brazil’s Selic Interest Rate Lowered 50 basis points to 5.50%

September 18, 2019

Copom, the monetary policy committee at Brazil’s central bank engineered its second 50-basis point interest rate cut of 2018 on Wednesday, but this was only the latest in an extensive easing cycle. The Selic rate was at 14.25% prior to October 2016, 875 basis points higher than the new level. All but 200 basis points of that easing was done in 2017. A statement released after this week’s unanimous decision to reduce the rate foresees a gradual economic recover and a convergence of inflation on target next year. The economy has plenty of slack, balanced risks, and sub-4% expected inflation. Future changes in monetary policy will be data-dependent.

Copyright 2019, Larry Greenberg. All rights reserved. No secondary distribution without expressed permission.



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