Central Bank of Brazil

February 3, 2022

Officials at the Central Bank of Brazil authorized a 150-basis point hike of their Selic interest rate to 10.75%. From a pandemic low of 2.0% prior to March 2021, there have been eight increases totaling 875 basis points. Brazilian CPI inflation accelerated from 4.6% in January 2021 to just over 10% currently and way above the 3.5% level targeted for 2022.

The Committee considers that, given the increase in its inflation projections and in the risk of a de-anchoring of long-term expectations, it is appropriate to advance the process of monetary tightening significantly into the restrictive territory. The Committee emphasizes that it will persist in its strategy until the disinflation process and the expectation anchoring around its targets consolidate.

Copyright 2022, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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