Brazil’s Central Bank Cuts Selic to 13.75%, Keeps Cautious Tone

Brazil’s Central Bank released the Copom meeting minutes on Tuesday (22), covering the committee’s 281st meeting, held September 15-16. The committee unanimously decided to cut the Selic benchmark rate by 0.25 percentage points, from 14% to 13.75% per year — the fifth consecutive cut of the same size, in a sequence that began in April.

Why Copom cut interest rates

According to the document, a gradual slowdown in economic activity justified the decision, especially in sectors more sensitive to the credit cycle. Even so, the economy remains resilient, and the labor market stays heated, the text notes.

Despite the cut, however, Copom kept a cautious tone. The minutes highlight that inflation expectations remain above target across all analyzed horizons: the Focus survey projects 4.9% for 2026 and 4.3% for 2027. According to the committee, a scenario of de-anchored expectations requires higher rates, held for longer, than would otherwise be necessary.

Global backdrop and next steps

The document also cites rising uncertainty on the international front, with geopolitical tensions in the Middle East and doubts about monetary policy in major advanced economies. Among the factors that could favor further cuts, the Central Bank points to a sharper global slowdown and a possible drop in commodity prices.

With this move, the Selic rate has now dropped a full percentage point since April, when it stood at 14.75%. Financial markets, meanwhile, already expect one more 0.25-point cut by December, which would bring the rate to 13.50% per year.