Brazil Central Bank keeps benchmark interest at 6.5% a year

At the last meeting this year, Brazil’s Central Bank kept the country’s benchmark interest Selic rate unchanged. The Monetary Policy Committee unanimously decided to leave the rate at 6.5 percent a year. The decision had been expected by analysts.

Today’s decision retains the Selic at its lowest since the current time series started, in 1986. Since October 2016, the committee has reduced the interest until it reached 6.5 percent a year in March 2018.

In May, the Central Bank interrupted a streak of cuts in the Selic and kept its value unaltered—a move that took the financial market by surprise. On the occasion, the institution argued that international instability, made visible by a pricier dollar, had played a significant role in the decision.

The Selic rate is the Central Bank’s main tool for curbing the official inflation, as measured by the National Broad Consumer Price Index (IPCA), which shows an increase of 4.05 percent in the 12-month period ending in November (lower than the center of the target, 4.5 percent). In November alone, the rate stood at a negative 0.21 percent, the lowest figure for the month since 1994.