Brasília – For the seventh consecutive time, the Brazilian Central Bank (BC) dropped the economy’s benchmark interest rates. Unanimously, the Monetary Police Committee (COPOM) reduced this Wednesday (26) the Selic rate in 1 percentage point, from 10.25% to 9.25% per year. The decision was expected by financial analysts.
With today’s reduction, the Selic reaches the lowest level since October 2013, when it stood at 9% per year. This is the first time that the economy’s benchmark interest rates return to a one-digit number in almost four years. Since November 2013, when COPOM increased the Selic to 10% per year, the rate remained at two-digits.
In a statement, the BC reported that political uncertainties didn’t impact, until now, the expectations regarding the inflation. The text, however, says that maintaining the pace of these cuts will depend on the continuity of the structural reforms that are being analyzed by Congress.
From October 2012 to April 2013, the interest rates were maintained at 7.25% per year, the lowest level in history. The Selic began to be re-adjusted gradually until reaching 14.25% per year in July 2015. Only in October of last year, COPOM again reduced the economy’s benchmark interest rates due to a decline in inflation.
*Translated by Sérgio Kakitani
