Brazil Interest Rate1999-2021 Data | 2022-2023 Forecast | Calendar | Historical

Brazil's central bank on Wednesday announced its third interest rate hike in 2021, a 75-basis point increase to 4.25% and anticipated a similar rise in August to mitigate the spread of current temporary shocks to inflation. Copom noted that, despite the intensity of the second wave of the pandemic, recent economic indicators showed a stronger-than-expected development. The Committee also emphasizes that its view for the next meeting will continue to depend on the evolution of economic activity, the balance of risks, and inflation projections and expectations.

Brazil's central bank on Wednesday announced its second interest rate hike in 2021, a 75-basis point increase to 3.5% and anticipated a similar rise in June to control inflation even as the economic recovery from the effects of the pandemic seems slower than estimated. Copom noted that despite an improved economic outlook, a worsening pandemic brought renewed uncertainty about the growth rate of the economy and the path of inflation. The Committee also emphasizes that its view for the next meeting will continue to depend on the evolution of economic activity, the balance of risks, and inflation projections and expectations.

The Central Bank of Brazil unexpectedly raised its benchmark interest rate by 75 basis points from an all-time low of 2 percent on 17 March 2021, above market expectations of a 50-bps increase. The decision was unanimous. The Committee said that the continuing increase in commodities prices, measured in local currency, are affecting current inflation and triggered additional increases in inflation forecasts for the next months, especially through its effects on fuel prices. For the next meeting, unless there is a significant change in inflation projections or in the balance of risks, the Committee foresees the continuation of the partial normalization process with another adjustment, of the same magnitude, in the degree of monetary stimulus. The Copom emphasizes that its view for the next meeting will continue to depend on the evolution of economic activity, the balance of risks, and inflation projections and expectations.

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.