Brasília – For the first time in one year and four months, the Central Bank of Brazil (BC) lowered this Wednesday the economy’s benchmark interest. The Monetary Policy Committee (Copom) unanimously decided to lower the Selic rate to 6% per annum, down 0.5 percentage point. This surprised the financial analysts, who expected just a 0.25 percentage point reduction.
With this decision, the Selic rate is at the same level as the beginning of BC’s historical series in 1986. In a release, Copom reiterated the need for structural reforms in the Brazilian economy so that the interest rate remains low for a long time.
“The Copom recognizes progress in the process of reforms and necessary adjustments in the Brazilian economy, but emphasizes that the continuation of this process is essential for the reduction of its structural interest rate and for sustainable economic recovery,” it reads.
The Central Bank indicated that new reductions may occur over the next few months. “The Committee deems that the consolidation of the benign scenario for prospective inflation should permit additional adjustment of the degree of stimulus,” the text adds. Copom’s next meeting is scheduled for September 18-19.
Translated by Guilherme Miranda
