Central Bank raises benchmark rate to 13.75% per year

This was the 12th consecutive increase in the Selic rate

Published in 04/08/2022 - 11:27 By Wellton Máximo - Repórter da Agência Brasil - Brasília

Amid the impacts of the war in Ukraine and a possible recession in the United States - with impacts on the global economy – Brazil´s Central Bank (BC) continued to tighten the belts on monetary policy and raised the country´s benchmark interest rate Selic on Wednesday (Aug. 3) from 13.25 percent to 13.75 percent a year.

This was the 12th consecutive increase in the rate. The Central Bank has maintained the pace of monetary tightening and, as in the last meeting, the rate was raised by 0.5 points.

In a statement, the bank informed that the risks of inflation being above expectations in longer terms made it choose not to end the Selic high cycle. However, it should reduce the pace of highs, raising the rate by 0.25 points at the next councilors' meeting, at the end of September.

According to the Central Bank, the uncertainty of the current situation, both domestic and global, combined with the advanced stage of the adjustment cycle and its accumulated impacts yet to be observed, demand additional caution.


Selic is the Central Bank's main instrument to keep official inflation under control, as measured by the Broad National Consumer Price Index (IPCA). In June, the indicator closed at 11.89 percent in the 12-month period, the highest level for the month since 2015. However, preliminary data about August's inflation show deceleration due to the fall in the price of energy and gasoline.

The estimated value is well above the ceiling of the inflation target. For 2022, the National Monetary Council (CMN) set an inflation target of 3.5 percent, with a tolerance margin of 1.5 percentage points. The IPCA, therefore, could not exceed 5 percent this year nor remain below 2 percent.

The increase in the Selic rate helps to control inflation. This is because higher interest rates make credit more expensive and discourage production and consumption. On the other hand, higher rates make economic recovery more difficult.

Translation: Mário Nunes -  Edition: Pedro Ivo de Oliveira

Latest news