Brazil’s Central Bank maintains interest rate at 13.75% per annum for the fifth consecutive time

The Monetary Policy Committee (Copom) of the Central Bank decided on Wednesday, in its second meeting of the year, to maintain the Selic basic interest rate at 13.75 percent per annum, in line with financial market expectations.

It was the fifth consecutive meeting in which Copom kept the Selic unchanged after closing in September.

The cycle of Selic rate hikes was initiated in March 2021, when the Selic rate was at 2 percent per annum.

“The episodes that have affected banks in the United States and Europe have increased market uncertainty and volatility and require monitoring.

At the same time, recent data on global activity and inflation have remained resilient and monetary policy in central economies continues on a contractionary path,” the central bank committee said in a statement.

Regarding the domestic scenario, the most recent economic activity indicators “continue to corroborate the slowdown scenario expected by Copom.”

“Consumer inflation, as well as various measures of core inflation, remain above the range compatible with meeting the inflation target,” it said.

According to financial market analysts, the forecast for the inflation index this year is 5.96 percent, and for next year 4.02 percent.

The official target is 3.25 percent inflation in 2023 and 3 percent next year, in both cases with a 1.5 percent tolerance.

The exact reasons for maintaining the Selic defined by Copom and the steps to be taken in the future will be explained in the minutes of this Wednesday’s meeting, which will be disclosed early next week.

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