Excerpt from the statement by the Central Bank of Brazil:
The Copom evaluates that the high inflation level and the dispersion of price increases, among other factors, contribute for inflation to show resistance and demand a monetary policy response. On the other hand, the Committee considers that domestic and, mainly, external uncertainties surround the prospective scenario for inflation and recommend that monetary policy should be administered with caution.
The judgment of all the Copom members is convergent with respect to the need for a monetary policy action aimed at neutralizing risks that arise in the prospective scenario for inflation, especially for the next year. Part of the Committee, however, considers that there is an ongoing reassessment of global growth and that this process, depending on its intensity and length, may cause positive impacts over domestic prices dynamics. For those members of the Committee, an immediate action of monetary policy would not be recommended; however, this view was not supported by the majority of the Board.
In this context, the Copom decided to increase the Selic rate to 7.50% p.a., without bias, with six votes for the monetary policy action and two votes in favor of maintaining the Selic rate in 7.25% p.a..