Brazil central bank cuts Selic rate 25 basis points to 13.75%
The unanimous decision matched forecasts from every analyst surveyed by Bloomberg, but the bank kept its warnings on inflation risk in place
Published
Brazil's central bank cut its benchmark interest rate by 25 basis points to 13.75%, extending a cutting cycle that has now trimmed the Selic by 1.25 percentage points since March 2026. The rate had stood at 14.00% before the decision, according to Bloomberg, which also reported that the cut was expected by all analysts it surveyed and marks the central bank's final policy decision before the presidential election.
The move continues a run of four straight cuts since June 2026 from a peak of 15.00% reached in 2025, according to Pomegra. Annual inflation, measured by the IPCA index, has eased to about 5.1%, still above the bank's 3.0% target, Pomegra reported, describing the reading as on a path toward that goal.
The bank's policy committee voted unanimously and said inflation risks remain higher than usual with an upward bias. It said it will keep watching longer-term inflation expectations and maintain what it called appropriately restrictive monetary policy. A Focus survey of analysts compiled by the central bank sees the Selic ending 2026 at 13.75% and falling to 12.00% by the end of 2027, with inflation near 5.00% this year, Rio Times Online reported, citing the survey.
The real was trading near 5.08 per US dollar ahead of the decision, according to Rio Times Online, which said analysts expected only modest currency pressure from a rate cut paired with a Federal Reserve that has held its own rates steady. The central bank's hawkish language on inflation risk sits alongside the cut itself, leaving the real's near-term direction unsettled. With trade talks between Brazil and the United States still active and political uncertainty high ahead of a possible 2026 rematch, the bank's continued vigilance on inflation suggests further rate cuts may be limited, a stance that could support the currency if the Fed keeps its own rates higher for longer.