The Monetary Policy Committee (Copom) of the Banco Central do Brasil decided at its November 3 to 4 meeting to maintain the Selic rate at 13.75 percent per year. All seven voting members, led by Governor Gabriel Galípolo, backed the decision, with no dissent recorded. The hold interrupts a run of five consecutive 25 basis point cuts that brought the rate down from a 15 percent peak in March to its September level.
The statement said headline inflation and the average of underlying inflation measures had accelerated in recent releases and stood above the upper limit of the tolerance band around the 3 percent target, which tops out at 4.5 percent. Focus survey expectations moved further from target, to 5.2 percent for 2026 and 4.8 percent for 2027, and the committee’s reference scenario projects inflation of 5.6 percent in 2026 and 4.7 percent in 2027, reaching 3.5 percent in the second quarter of 2028, the horizon it treats as relevant for policy. Risks to inflation in both directions remain higher than usual, the committee said, with an upward asymmetry, and it pointed to deanchoring expectations, a positive output gap keeping services inflation resilient, and a persistently weaker currency among the upside risks. It also said it is monitoring the effects of domestic fiscal policy and described the external environment as more adverse, citing Middle East conflicts pushing up oil prices and tighter monetary policy in advanced economies.
Copom gave no explicit signal for its next meeting, on December 8 to 9, saying the current stance is substantially contractionary and that it will keep monetary policy adequately restrictive to ensure inflation converges to target. The decision was the committee’s first since the October 25 presidential runoff, after which the Ibovespa fell 13.9 percent and the real 8.1 percent in a single session and interbank futures swung from pricing further cuts toward a possible hike, before settling on a hold as the consensus going into the meeting.