News

Brazil Holds Interest Rate at 2%, Drops Forward Guidance
The Central Bank of Brazil unanimously decided to keep its benchmark interest rate at an all-time low of 2.00 percent on 20 January 2021, as widely expected. The Committee said that recent indicators suggest an improved but uneven recovery in domestic economic activity as uncertainty about growth remains larger than usual. Policymakers noted that inflation readings were higher than expected, as the headline for December jumped to 4.5% from 4.3% in the previous month, rising for the seventh. Still, the bank warned that uncertainty remains unusually high and that it will change to a balance-of-risks approach rather than forward guidance. The Committee warned that the removal of the forward guidance does not mechanically imply interest rates increases, since, at this moment, uncertainties regarding the evolution of growth still prescribe an extraordinarily strong monetary stimulus.
Published on 2021-01-20

Brazil Holds Rates at Record Low
The Central Bank of Brazil unanimously decided to keep its benchmark interest rate at an all-time low of 2.00 percent on 9 December 2020, as widely expected. The Committee said that recent indicators suggest an improved but uneven recovery in domestic economic activity as uncertainty about growth remains larger than usual. Policymakers noted that inflation readings were higher than expected, as the headline for November jumped to 4.3% from 3.9% in the previous month. The bank also said that the current economic conditions continue to recommend an unusually strong monetary stimulus but it recognised that due to prudential and financial stability reasons the remaining space for stimulus, if it exists, should be small. The Committee deems as adequate the current level of monetary stimulus and the forward guidance introduced in the 232nd meeting.
Published on 2020-12-09

Brazil Holds Interest Rate at 2%
The Central Bank of Brazil unanimously decided to keep its benchmark interest rate at an all-time low of 2.00 percent on October 28th 2020, as widely expected. The Committee said that recent indicators suggest an uneven recovery in domestic economic activity as uncertainty about growth remains larger than usual, especially for the period starting at the end of this year, concurrently with the expected unwinding of the emergency transfer programs. Policymakers noted that inflation readings were higher than expected and raised projections for the remaining months of 2020. The bank also said that the current economic conditions continue to recommend an unusually strong monetary stimulus but it recognised that due to prudential and financial stability reasons the remaining space for stimulus, if it exists, should be small. The Committee deems as adequate the current level of monetary stimulus and the forward guidance introduced in the 232nd meeting.
Published on 2020-10-28

Brazil Holds Interest Rate at Record Low of 2%
The Central Bank of Brazil unanimously decided to keep its benchmark interest rate at an all-time low of 2.00 percent on September 16th 2020, as widely expected. Policymakers noted that inflation climbed to 2.44 percent in August from 2.31 percent nudged by prices of food and some services. The Committee said that recent indicators suggest a partial recovery in domestic economic activity, still sectors more directly affected by social distancing measures remain depressed despite the offsetting effects of the government transfer programs. Policymakers added that the uncertainty about economic growth remains larger than usual, especially for the period starting at the end of this year. The bank also said that the current economic conditions continue to recommend an unusually strong monetary stimulus but it recognised that due to prudential and financial stability reasons the remaining space for stimulus, if it exists, should be small.
Published on 2020-09-16

Brazil Cuts Interest Rates to Fresh Record Low
The Central Bank of Brazil unanimously decided to slash its benchmark interest rate by 25 bps to a new all-time low of 2.00 percent on August 5th, 2020, as widely expected. Policymakers noted that the economy is expected to contract further in Q2 to levels not seen since the Great Depression with the environment for emerging economies remaining challenging. Inflation is expected to pick up in 2021 and 2022 to 3.0 percent and 3.5 percent, respectively, from 1.6 percent in 2020. The bank does not foresee further reductions in the monetary stimulus, despite a high level of uncertainty from the coronavirus pandemic.
Published on 2020-08-05

Brazil Central Bank Outlines Private Bond-Buying Details
The Central Bank of Brazil outlined details of its private sector bond-buying program on the secondary market in a statement released on June 23rd 2020. The program aims to provide liquidity in the corporate bond market and to tackle potential dysfunctions amid the coronavirus crisis. Assets with a credit rating equivalent to "BB-" or higher, which are non-convertible into shares and have a maturity of at least 12 months, will be eligible for purchase taking into account the reference prices published by Anbima and B3. The bank added that there will be limits in the portfolio per issuer, per series of assets in the market and in relation to the risk classes of the assets in order to better control risk. The Central Bank of Brazil cut its benchmark interest rate by 75 bps to a fresh all-time low of 2.25% on June 17th 2020, as widely expected.
Published on 2020-06-23

Brazil Cuts Interest Rates to Fresh Record Low
The Central Bank of Brazil unanimously decided to slash its benchmark interest rate by 75 bps to a new all-time low of 2.25 percent on June 17th 2020, as widely expected. Policymakers noted that the economy is expected to contract further in Q2 and that the pandemic is particularly being felt in emerging markets. The Committee said that persevering in the process of reforms and necessary adjustments in the economy is essential for a sustainable economic recovery. Policymakers added that uncertainty regarding the reform agenda and permanent changes to the fiscal consolidation process could result in an increase in the structural interest rate. The Committee said that conditions prescribe expansive monetary policy, but the space for further easing is now very limited. Policymakers are monitoring the economic scenario and inflation expectations and said that further information on the evolution of the pandemic and a decline in fiscal uncertainty will be essential for its next steps.
Published on 2020-06-17

Brazil Cuts Interest Rates to Record Low
The Central Bank of Brazil unanimously decided to slash its benchmark interest rate by 75 bps to a new all-time low of 3 percent on May 6th 2020, more than market expectations of a 50 bps cut. The move follows a 50 bps rate cut in the March meeting, amid the coronavirus crisis. Policymakers noted that the impact of the outbreak in the domestic economy has been felt and it is expected a deeper economic contraction than previously forecasted. The Committee said that fiscal policy responses to the outbreak that permanently aggravate the fiscal trajectory are necessary for a sustainable economic recovery. Policymakers added that the fiscal trajectory over the next year will be crucial to determine the length of the stimulus. Policymakers said that they are considering a final monetary adjustment for the next meeting, not larger than this one, to complete the change to the policy rate that it deems adequate to counteract the economic consequences from the covid-19.
Published on 2020-05-06

Brazil Cuts Interest Rate By 50 Bps to 3.75%
The Central Bank of Brazil followed other peers around the world and cut its benchmark interest rate by 50bps to a fresh all-time low of 3.75% on March 18th, in a bid to mitigate the effects of the coronavirus spread. Markets were pricing for a 25bps cut, following the same magnitude move at its February meeting. Policymakers noted that the coronavirus pandemic is causing a significant global growth slowdown, that risks to its baseline scenario remain in both directions, and added that economic conditions prescribe stimulative monetary policy, that is, interest rates below the structural level. The Committee said that they will continue to use its entire arsenal of monetary, exchange rate and financial stability policies to fight the crisis. Policymakers added that at the moment it is appropriate to keep rates at its new level, still it prescribes caution in the conduct of monetary policy as the risk balance increased and new information will be essential to define its next steps.
Published on 2020-03-18

Brazil Opens Door to Rate Cut
The Central Bank of Brazil followed other peers around the world and on March 3rd opened the door to further rate cuts aiming to calm investors’ nerves amid the coronavirus spread. The bank said in the statement that it’s closely monitoring the impacts of the coronavirus outbreak on financial conditions and the Brazilian economy, and added that the next weeks will allow for a more accurate assessment of the effects on the prospective inflation path. During the last meeting in February, the BCB lowered its key Selic rate by 25 bps to 4.25 percent, bringing borrowing costs to the lowest on record.
Published on 2020-03-04

Brazil Cuts Interest Rate to All-time Low; Signals Pause
The Central Bank of Brazil voted unanimously to trim its key Selic rate by 25 bps to 4.25 percent during its February 2020 meeting, as widely expected and following a 50-bps cut in December. It was the fifth consecutive rate cut bringing borrowing costs to its lowest on record, amid global economic slowdown, the coronavirus outbreak, and a slow recovery in the domestic economy. Policymakers said that the the current stage of the business cycle needs caution in the conduct of monetary policy and added that the interruption of the monetary easing process is appropriate after an easing cycle that started in July 2019. The Committee added that next decisions will continue to be data dependent. Policymakers noted that the inflation rate rose to 4.31 percent in December from 3.27 percent in November, and it is expected to be at 3.4 percent for this year and at 3.75 percent for 2021.
Published on 2020-02-05

Brazil Slashes Interest Rate to Fresh Record Low of 4.5%
The Central Bank of Brazil voted unanimously to trim its key Selic rate by 50 bps to 4.50 percent during its December meeting. It was the fourth consecutive rate cut bringing borrowing costs to its lowest on record, amid the global economic slowdown and a recovery in the domestic economy. Policymakers said that the the current stage of the business cycle needs caution in the conduct of monetary policy and added that next decisions will be data dependent.
Published on 2019-12-11

Brazil Trims Interest Rate for 3rd Straight Meeting to 5%
The Central Bank of Brazil voted unanimously to trim its key Selic rate by 50 bps to 5.0 percent during its October meeting. It was the third consecutive rate cut bringing borrowing costs to its lowest on record, amid the global economic slowdown and a more gradual pace of recovery than expected, as underscored in the latest press release. Policymakers deemed that the consolidation of the benign scenario for prospective inflation should permit additional adjustment of the same magnitude and added that the next steps in the conduct of monetary policy will continue to depend on the evolution of economic activity, the balance of risks, and on inflation projections and expectations.
Published on 2019-10-30

Brazil Cuts Interest Rate to Fresh Record Low
The Central Bank of Brazil voted unanimously to trim its key Selic rate by 50bps to 5.50 percent during its September meeting, as widely expected. It is the second consecutive rate cut bringing borrowing costs to its lowest on record, amid the global economic slowdown and as key domestic reforms continue to move forward. Policymakers deemed that the consolidation of the benign scenario for prospective inflation should permit additional adjustment of the degree of stimulus and added that the next steps in the conduct of monetary policy will continue to depend on the evolution of economic activity, the balance of risks, and on inflation projections and expectations.
Published on 2019-09-18

Brazil Cuts Rate by 50 Bps on Weaker Growth, Lower Inflation
The Central Bank of Brazil voted unanimously to lower its key Selic rate by 50bps to a record low of 6 percent during its July meeting, while markets had forecast a smaller 25bps cut. The Committee signalled further easing, underscoring that recent data indicate weaker economic activity from previous quarters; a decelerating global economy and slower domestic inflation.
Published on 2019-07-31

Brazil Holds Rate at 6.5% Amid Economic Struggle
The Central Bank of Brazil voted unanimously to hold its key Selic rate at a record low of 6.50 percent on 19 June 2019, as widely expected. The Committee underscored that recent data on economic activity indicate a halt in the process of economic recovery in the past quarters. The economic recovery is still taking longer than expected, with recent negative data. The Brazilian economy shrank 0.2 percent on quarter in the first quarter of 2019, slowing from a 0.1 percent expansion in the previous period.
Published on 2019-06-19

Brazil Holds Interest Rate at 6.5%
The Central Bank of Brazil voted unanimously to hold its key Selic rate at a record low of 6.50 percent on May 8th 2019, as widely expected. Policymakers said that the decision is consistent with the convergence of inflation to the target range and will continue to depend on the evolution of economic activity, inflation outlook and balance of risks. The Committee added that developments of the reform agenda will affect current expectations and macroeconomic projections.
Published on 2019-05-08

Brazil Leaves Monetary Policy Unchanged
The Central Bank of Brazil voted unanimously to hold its key Selic rate at a record low of 6.50 percent on March 20th 2019, as widely expected. Policymakers noted that recent data on economic activity came in below expectations, still the domestic economy continues on a gradual recovery path and added that the global outlook remains challenging.
Published on 2019-03-20

Brazil Holds Interest Rate at 6.5%
The Central Bank of Brazil voted unanimously to hold its key Selic rate at a record low of 6.50 percent on February 6th 2019, as widely expected. Policymakers said that the decision reflects its baseline scenario for prospective inflation and its risks and it is consistent with the convergence of inflation to the target range.
Published on 2019-02-06

Brazil Holds Interest Rate at 6.50% as Expected
The Central Bank of Brazil voted unanimously to hold its key Selic rate at 6.50 percent on 12 December 2018 as widely expected, keeping borrowing costs at the lowest level in modern history amid target inflation and lackluster GDP growth. It was the second monetary policy meeting after the presidential election.
Published on 2018-12-12