The bank lowered the Selic to 12.75% late on Wednesday, as expected by all 40 analysts surveyed by Bloomberg. The decision was in line with the bank’s prior guidance, which policymakers maintained unchanged.
Policymakers’ move follows the Federal Reserve’s decision earlier in the day to leave its benchmark interest rate unchanged while signaling borrowing costs will likely stay higher for longer after one more hike this year.By contrast, several Latin American countries aside from Brazil have also been relaxing monetary policy, including Peru, Chile and Uruguay. Earlier on Wednesday, Paraguay cut rates by 25 basis points to 8%.
“Given the importance of the execution of the fiscal targets already established for the anchoring of inflation expectations, and hence for the conduct of monetary policy, the Committee reinforces the importance of firmly pursuing those targets,” central bankers wrote in the statement.
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