Selic Rate Falls to 13.75% Hours After the Fed Raises American Rates
Brazil · Markets
Key Facts
- —What happened Brazil’s central bank cut its benchmark interest rate by a quarter of a percentage point.
- —The new level 13.75 percent a year, down from 14 percent, effective from Thursday.
- —How many cuts The fifth in a row, all of the same size, since the easing began in March.
- —What the committee said The decision fits its strategy of bringing inflation back towards the target.
- —The catch It gave no promise about November, saying the next step depends on the data.
- —Why the timing is odd The US Federal Reserve raised its own rate four hours earlier the same day.
Brazilians call a day with two central bank decisions a super Wednesday. This one went in two directions at once, and the Brazilian half was the quieter of the two. Our guide to the Selic rate explains what each decision means for dollar investors.
Brazil’s Selic rate came down again on Wednesday evening. The central bank’s rate-setting committee cut it by a quarter of a percentage point, to 13.75 percent a year.
The new level applies from Thursday. It is recorded as the committee’s 281st meeting in the bank’s own interest rate register.
This is the fifth cut in a row, and each one has been the same size. CNN Brasil reported that the decision was unanimous.
Where the Cycle Started
Brazilian rates peaked at 15 percent in June of last year. The committee then held them there through six consecutive meetings.
The easing began in March of this year. Since then the Selic rate has come down by a full 1.25 percentage points, a quarter at a time.
That is a slow pace by Brazilian standards. It is also a deliberate one, and the committee has used the same word for it each time: caution.
What the Committee Actually Said
The statement describes the decision as compatible with bringing inflation back towards the target. It adds that it also smooths swings in economic activity and supports full employment.
Then comes the warning. The current scenario, the committee wrote, is marked by a significant rise in uncertainty and by expectations drifting away from the target.
That scenario, it said, demands serenity and caution. The phrase is unusual for a central bank and it was chosen carefully.
On what happens next there is no promise. Whether the cycle continues depends on how the picture develops in the light of new information.
The Inflation Picture Behind It
Consumer prices actually fell in August, by 0.32 percent over the month. Over twelve months inflation stands at 4.22 percent.
Brazil aims for 3 percent, with a tolerance band of 1.5 points either side. The twelve-month figure therefore sits inside the band but above the target.
The problem is the forecast rather than the reading. Economists surveyed by the central bank expect 4.9 percent for this year, above the top of the band.
The same survey expects the Selic rate to end the year exactly where it now is. On that view Wednesday was the last cut of 2026.
The Other Half of the Day
Four hours earlier the US Federal Reserve moved the other way. It raised its target range by a quarter point, to between 3.75 and 4 percent, on a vote of twelve to nothing.
That was the first American increase since July 2023. Brazilian commentators spent the day calling it a super quarta invertida, an inverted super Wednesday.
The label is good but the novelty is overstated. The two last moved opposite ways on the same day on 18 September 2024, when the Fed cut and Brazil raised.
Same-day decisions are ordinary. The two calendars have coincided six times since mid-2025, which is why Brazil has a nickname for it.
What the Market Had Already Done
One thing needs stating plainly. The São Paulo session ends at 5pm Brasília time, ninety minutes before the committee announced.
So Wednesday’s closing numbers price in the American decision and nothing else. The Ibovespa finished at 185,547.66 points, down 0.51 percent.
The dollar ended the session at 5.151 reais, a fraction weaker on the day. Vale and Petrobras were the heaviest drags on the index.
The real verdict on the Selic rate arrives on Thursday morning, in the interest rate futures market. That is where any disagreement with the committee shows up first.
What It Means If You Live Here
A lower Selic rate feeds slowly into what banks charge. Mortgages, car loans and overdrafts follow it down with a lag of months, not days.
It also lowers what savers earn on fixed income, which is where most Brazilian household money sits. Anyone rolling over a deposit will notice that first.
For a foreigner holding dollars the gap between the two countries has now narrowed twice over. Brazil pays less and the United States pays more.
The committee meets again on 3 and 4 November. The minutes of Wednesday’s meeting are due on Tuesday, and they usually say more than the statement does.
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Frequently Asked Questions
What is the Selic rate?
The Selic is Brazil’s benchmark interest rate, set roughly every seven weeks by the central bank’s monetary policy committee, known as the Copom. It anchors what banks charge borrowers and pay savers, and it is the single number Brazilian markets watch most closely. As of 17 September 2026 it stands at 13.75 percent a year.
Why is Brazil cutting while the United States is raising?
The two economies are at different points in the same cycle. Brazilian consumer prices actually fell in August and twelve-month inflation is inside the tolerance band, which gives the committee room. American inflation picked up over the summer and the August reading came in hot, which pushed the Federal Reserve the other way.
Will there be another cut in November?
The committee did not say. Its statement makes any further move conditional on how the outlook develops, and economists surveyed by the central bank expect the rate to finish the year at 13.75 percent, meaning no further cut in 2026. The same survey sees it falling to around 12 percent by the end of 2027.
How quickly will this reach ordinary borrowers?
Not quickly. Changes in the Selic rate reach mortgages, car loans and credit card terms over a period of months rather than immediately, and Brazilian banks pass cuts on more slowly than they pass on increases. Savers usually feel the change first, because deposit and fixed-income returns reset as products are rolled over.
Sources: Banco Central do Brasil, official interest rate register, CNN Brasil on the decision and the statement, Poder360 on the decision, Federal Reserve statement of 16 September 2026, Exame on Wednesday’s session in São Paulo, Federal Reserve statement of 18 September 2024
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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