The Monetary Policy Committee (Copom), of Brazil’s Central Bank, decided to keep the country’s benchmark interest rate at 6.5% per annum. The decision, made Wednesday (May 16), comes as a surprise to market analysts, who had been expecting a reduction.
From October 2012 to April 2013, the rate had been held steady at 7.25% a year and underwent a series of hikes until it reached a yearly 14.25% in July 2015. In October 2016, Copom once again took to reducing the interest rate until it sank to 6.5% in March, the lowest level until then.
The rate is used in the negotiations of public securities under the System of Settlement and Custody (Selic), and serves as a parameter for the other interest rates in the economy.