Brazil benchmark interest rate down to 5.5% a year

The Monetary Policy Committee (Copom) of Brazil’s Central Bank decided to reduce the country’s benchmark interest rate—the Selic—by 0.5 percentage points. This brings the rate from six to 5.5 percent a year.

The committee declared that the interest rate should close out 2019 at five percent a year and remain steady until the end of 2020.

The Selic is the Central Bank’s main tool to curb Brazil’s official inflation, currently at the lowest level since the beginning of this time series, in 1986.

The committee reiterated the need to advance structural reforms in the Brazilian economy so that interest remains low for a long time. “Copom believes that the process of necessary reforms and adjustments in the Brazilian economy has made strides, but stresses that persevering in the process is key to the reduction in the structural interest rate and the sustainable recovery of the economy.”