Brazil Central Bank Holds Selic at 13.75% as Lula Reelection Lifts Inflation Risks
Updated
Updated · Reuters · Nov 4
Brazil Central Bank Holds Selic at 13.75% as Lula Reelection Lifts Inflation Risks
3 articles · Updated · Reuters · Nov 4
Summary
Brazil's central bank unanimously kept the Selic rate at 13.75%, ending a run of cuts that had lowered borrowing costs by 125 basis points since March.
Copom raised its inflation forecasts, said risks were tilted upward, and dropped earlier language pointing to further easing, while stressing the need for "serenity and caution."
The bank also flagged a sharper domestic slowdown and called the current rate substantially contractionary, leaving analysts split on whether easing could resume if fiscal policy tightens.
Lula has not yet detailed spending-control plans or key economic appointments after his Oct. 25 reelection, a gap that has fueled market volatility, a sharp real selloff and concern over debt near 83% of GDP.