Brazil Central Bank raises benchmark interest rate to 7.75% a year

The value is at its highest since October 2017

Published in 28/10/2021 - 13:52 By Wellton Máximo - Brasília

The Monetary Policy Committee (Copom), of Brazil’s Central Bank, has raised the economy’s benchmark interest rate—the Selic—from 6.25 to 7.75 percent a year.

In a statement, Copom reported the instability in the financial market brought about by the decision of changing how the government’s spending cap is calculated led the Central Bank to further increase the pace of monetary constriction. In the assessment of Copom members, recent events have risen the risk of inflation growing more than expected, which justifies the hike in interest.

Copom also announced it should pull up the Selic by 1.5 percentage points at its next meeting, in December. The value is at its highest since October 2017, when it reached 8.25 percent a year.


The benchmark interest rate is used in negotiations of bonds under the Special Clearance and Escrow System (Selic), and serves to gauge the other interest rates of the economy.

The rate is the Central Bank’s main tool for curbing Brazil’s official inflation, as measures by the National Broad Consumer Price Index (IPCA). The indicator closed out September at the highest level for the month since 1994, and is up 10.25 percent in the 12-month period, pressed by the dollar and the hike in fuel and electric energy prices.

The value is above the ceiling of the inflation target. For 2021, the National Monetary Council (CMN) had set the target at 3.75 percent, with a tolerance margin of 1.5 percentage points. The IPCA, however, was not to overcome 5.25 percent this year or stay below 2.25 percent.

Translation: Fabrício Ferreira -  Edition: Fábio Massalli / Nira Foster

Latest news