Brazil benchmark interest raised to 11.75% a year

The rate is at its highest since April 2017

Published in 17/03/2022 - 10:53 By Wellton Máximo - Brasília

Amid the impact of the war in Ukraine on the global economy, Brazil’s Central Bank continued to tighten monetary policy belts. Its Monetary Policy Committee (COPOM) raised the Selic—the country’s benchmark interest rate—from 10.75 to 11.75 percent a year.

In a statement, the Central Bank stated that the current moment requires caution, and reported that the next increase should also be one percentage point. The authority may reconsider the pace of monetary tightening if necessary, the text goes on to read.

The rate is at its highest since April 2017, when it stood at 12.25 percent a year. This was the ninth consecutive adjustment to the Selic rate. Despite the move, the Central Bank has reduced the pace of monetary tightening. After three consecutive 1.5 percentage-point expansions, the rate was raised by one point.


The Selic rate is the Central Bank’s main tool for curbing the country’s inflation, as gauged by the National Broad Consumer Price Index (IPCA). The indicator closed out February at 10.54 percent for the 12-month period—the highest for the month since 2015, pressured by fuels and hikes in education expenses early in the year.

The amount is above the ceiling of the inflation target. For 2022, the National Monetary Council (CMN) has set an inflation target of 3.5 percent, with a tolerance margin of 1.5 percentage points. The IPCA, therefore, should not soar beyond five percent this year or sink below two percent.

Market forecasts are more pessimistic. According to the Focus bulletin, a weekly survey of financial institutions published by the Central Bank, official inflation should close the year at 5.38 percent. The projection was raised after the recent increase in fuel prices.

Translation: Fabrício Ferreira -  Edition: Kelly Oliveira

Latest news