BRAZIL ECONOMY · INTEREST RATES
Brazil’s central bank has stopped cutting interest rates and left the Selic at 13.75%. It says uncertainty has risen sharply.
Key Facts
- Power Index Brazil ranks 1st of 14 in The Rio Times Latin America Power Index, with 75.0 points (October 2026 edition).
- What happened At its November meeting, Brazil’s central bank held the Selic at 13.75%, ending five straight cuts; the vote was unanimous.
- The numbers Inflation is 4.58% against a 4.5% tolerance ceiling; the real trades near R$5.49 per US dollar.
- What to watch Central bank survey Monday 9 November; rate-committee minutes Tuesday 10 November; next decision Wednesday 9 December.
- Prediction markets Polymarket gives 73.0% to no change in December and 12.5% to a quarter-point cut (4 November, 4:57 p.m. ET).
Brazil’s central bank slammed the brakes on Wednesday, ending five straight interest rate cuts as a political shock rattles the markets. Its rate committee, known as Copom, held the benchmark rate at 13.75% a year in a unanimous vote announced at about 4:31 p.m. ET on 4 November 2026.
The Selic is the rate that sets borrowing costs across Brazil, from loans to government bonds, and it has stood at 13.75% since September. The pause comes days after President Luiz Inácio Lula da Silva’s re-election on 25 October, after which the Ibovespa, Brazil’s main stock index, fell 13.9% in one day.
What Did the Central Bank Say?
Copom said the outlook is more uncertain, inflation expectations are higher and the economy is slowing faster than it expected. It called this a challenging mix that demands “serenity and caution”, and said it will keep policy restrictive enough to bring inflation back to target.
It also looked abroad: conflicts in the Middle East have lifted oil prices, and monetary policy in rich economies has turned tighter. The committee said that calls for extra care in emerging markets, whose currencies swing more easily.
Why Stop Cutting Now?
Inflation is the main reason. Consumer prices rose 4.58% in the 12 months to September, according to IBGE, Brazil’s statistics agency, above the 4.5% ceiling of the central bank’s tolerance range around its 3% goal.
See our guide to Brazil’s inflation outlook.Analysts expect more of the same. The central bank’s weekly Focus survey of economists sees inflation of 5.2% in 2026 and 4.8% in 2027, while the bank’s own forecast for the second quarter of 2028, its policy horizon, is 3.5%.
The weaker real adds pressure, because a cheaper currency makes imports dearer. On Tuesday 3 November the central bank’s official rate was R$5.49 per US dollar, 1.3% weaker than on Friday 30 October; our real-to-dollar guide explains the rate.
In Plain English
Selic: Brazil’s benchmark interest rate, set by the central bank.
Copom: the central bank committee that decides the Selic eight times a year.
A hold: the rate stays where it is. It is neither a cut nor a rise.
Live Market IntelligenceBrazil — Live Market Board
Rio Times · Live Market Intelligence
Brazil — Live Market Board
+1.23%
167,563.47
+1.23%
71,385.90
+1.71%
10,627.00
+2.52%
2,848,945
—
2,506.42
-0.84%
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 167,563.47 | +1.23% | +19.56% | 165,528.92 | 178,526 | 175,157 | — |
| USD/BRL | 5.34 | -1.32% | -0.84% | 5.42 | 5.42 | 5.30 | — |
| SELIC | 13.75% | — | — | — | — | — | |
| PETR4 | 53.31 | -1.06% | +77.70% | 53.88 | 53.70 | 52.83 | 43,239,500 |
| VALE3 | 62.88 | -2.33% | +1.98% | 64.38 | 64.43 | 62.80 | 24,652,300 |
| ITUB4 | 41.42 | -0.67% | +11.30% | 41.70 | 42.60 | 41.15 | 28,160,700 |
| BBDC4 | 15.69 | -1.63% | -13.88% | 15.95 | 16.30 | 15.67 | 65,766,400 |
| BBAS3 | 17.59 | +0.69% | -15.59% | 17.47 | 18.31 | 17.51 | 67,844,600 |
| B3SA3 | 15.27 | +1.33% | +21.71% | 15.07 | 15.78 | 15.20 | 75,282,000 |
| ABEV3 | 15.40 | +0.20% | +26.75% | 15.37 | 15.68 | 15.31 | 27,307,400 |
| WEGE3 | 45.78 | +2.81% | +10.06% | 44.53 | 47.08 | 45.06 | 9,823,200 |
| PRIO3 | 69.21 | -2.71% | +87.14% | 71.14 | 70.98 | 69.15 | 6,663,200 |
| SUZB3 | 47.14 | -0.55% | -3.79% | 47.40 | 47.84 | 46.10 | 7,151,800 |
| RENT3 | 31.14 | -1.67% | -20.73% | 31.67 | 32.68 | 31.02 | 19,092,400 |
| AZZA3 | 16.72 | +1.15% | -42.24% | 16.53 | 17.42 | 16.72 | 4,875,400 |
| CSNA3 | 4.76 | -4.99% | -47.09% | 5.01 | 5.14 | 4.76 | 14,327,900 |
| GGBR4 | 24.87 | -2.28% | +36.28% | 25.45 | 26.20 | 24.79 | 7,507,900 |
| ENEV3 | 26.79 | +0.45% | +49.78% | 26.67 | 27.35 | 26.30 | 12,263,000 |
Where Does the Selic Stand Now?
The Selic stood at 15% at the start of March, and the bank trimmed it by a quarter-point five times, in March, April, June, August and September. That took it down 1.25 points to 13.75%, still about 9 percentage points above inflation.
A hold is not a hike, and the statement did not say the cuts are over. But it left the next step open, so the December meeting is a genuine question.
What Prediction Markets Say
Polymarket, a platform where users trade real-money bets on events, prices the next Copom decision on 9 December at 73.0% for no change and 12.5% for a quarter-point cut. It gives about 5.1% to a quarter-point rise, with US$54,491 traded, as of 4:57 p.m. ET on 4 November.
Prices are bets, not polls.
Why we show this: prediction markets turn real-money bets into a live probability that moves within minutes of the news, which is why investors, campaigns and newsrooms in the United States now follow them closely. We show them next to polls and official results, never instead of them.
What It Means for US Readers
The winner is anyone holding Brazilian bonds or reais, who keeps a high yield. The loser is anyone borrowing in reais, and any dollar investor if a sliding real eats that yield.
US holders of Brazilian ADRs (US-listed receipts of foreign shares) face a steadier rate but a shakier currency. These include Petrobras (PBR, the state-controlled oil major), Vale (VALE, an iron-ore miner), Itaú (ITUB, a large private bank) and Nubank (NU, a digital bank).
Travellers and expats paid in dollars got about R$5,490 per US$1,000 at Tuesday’s official rate.
What Is Not Known
Copom did not say how long the pause will last. Nor is it clear how Lula’s government will handle public spending, which could shape inflation expectations.
Brazilian markets could not react on Wednesday, because the decision came after trading ended. The first reaction is due on Thursday 5 November.
What Would Change the Picture?
The next signals arrive quickly. The Focus survey on Monday 9 November shows whether analysts still expect a cut this year, and the Copom minutes on Tuesday 10 November, due at 6 a.m. ET, explain the debate in more detail.
IBGE’s October inflation report follows on Thursday 12 November, and the next rate decision comes on Wednesday 9 December. Inflation staying above the 4.5% ceiling would favour more waiting.
Frequently Asked Questions
What is Brazil’s Selic rate now?
The Selic is 13.75% a year after the central bank held it on 4 November. It had cut the rate five times by 0.25 points since March, from 15%.
Why did Brazil stop cutting interest rates?
Copom cited higher uncertainty, rising inflation expectations, slower growth and oil-driven global risks. Inflation was 4.58% in the 12 months to September, above the 4.5% tolerance ceiling.
Sources: Banco Central do Brasil, Copom statement of 4 November 2026 and Selic target series; Banco Central do Brasil, Focus survey and official dollar rate; IBGE, IPCA consumer prices; B3, Ibovespa closing data; Polymarket, Bank of Brazil decision in December (accessed 4 November 2026, 4:57 p.m. ET).
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
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