Brazil Interest Rate

The Central Bank of Brazil raised its Selic rate by 100 bps to 14.25% in March 2025, aiming to bring inflation closer to the target. While its primary goal is price stability, the decision also seeks to reduce economic fluctuations and support full employment. The external environment remains challenging, particularly due to uncertainty over US trade policy, which has raised concerns about economic slowdown, disinflation, and the Fed's stance. Central banks of major economies continue to focus on converging inflation rates to their targets despite labor market pressures. Domestically, economic and labor market indicators show dynamism, though growth is moderating. Inflation expectations for 2025 and 2026 have risen significantly to 5.7% and 4.5%, respectively. The Committee remains cautious and ready to adjust its policy as conditions evolve.