Central Bank of Brazil Rate Cut Lessens in Size
May 9, 2024
The Central Bank of Brazil’s Selic interest rate has been cut for a seventh time since August 2023 but by a smaller increment of 25 basis points. The first six reductions were twice that size. A more gradual easing is now warranted in spite of March’s 9-month CPI inflation rate low of 3.9% because of a slowdown in the rate of disinflation and due to “deanchored inflation expectations and a challenging global outlook,” according to a statement from the monetary policy committee known as COPOM. The Selic rate had been as low as 2.0% from August 2020 until an initial hike in March 2021 but was subsequently raised a dozen times by a total of 1,175 basis points and then maintained at 13.75% for a full year between August 2022 and August 2023.
Copyright 2024, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Central Bank of Brazil
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