Brazil’s Central Bank keeps benchmark interest rate at 15% per annum
The decline in inflation and the slowdown in the economy led Brazil’s Central Bank to keep interest rates unchanged. Unanimously, the Monetary Policy Committee (Copom) maintained the Selic rate, the economy’s benchmark interest rate, at 15 percent per year.
In a statement, the bank said that the external environment remains uncertain due to the economic situation and policies in the United States, with repercussions for global financial conditions.
In Brazil, the statement highlighted that inflation remains above the target despite the slowdown in economic activity, indicating that interest rates will stay high for quite some time.
“The current scenario, marked by high uncertainty, calls for caution in conducting monetary policy. The committee assesses that maintaining the current interest rate for a fairly prolonged period is sufficient to ensure inflation converges to the target,” the Central Bank stated, without ruling out the possibility of raising rates again “if deemed appropriate.”
This is the third consecutive meeting in which Copom has kept the benchmark interest rate at 15 percent per year, a level set in July of this year. The rate is at its highest point since July 2006, when it stood at 15.25 percent per year.
Inflation
The Selic rate is the Central Bank’s main instrument for keeping official inflation, measured by the Broad National Consumer Price Index (IPCA), under control. In September, the IPCA rose 0.48 percent, driven by higher energy bills. With this result, the index accumulated a 5.17 percent increase over 12 months, exceeding the upper limit of the continuous inflation target.
Under the new continuous inflation targeting system, in effect since January of this year, the inflation target set by the National Monetary Council for the Central Bank to pursue is 3 percent, with a tolerance range of 1.5 percentage points above or below. In other words, the lower limit is 1.5 percent and the upper limit is 4.5 percent.
In the continuous inflation targeting model, the target is calculated on a monthly basis, taking into account inflation accumulated over the previous 12 months. In November 2025, for example, inflation since December 2024 is compared with the target and its tolerance range. In December, the process is repeated, with calculations starting from January 2025. This means that verification shifts over time and is no longer limited to the inflation rate recorded at the end of each calendar year.
The basic interest rate is used in the trading of government bonds within the Special System for Settlement and Custody (Selic) and serves as a benchmark for other interest rates in the economy.
