Policy rate cut to 13.75 percent in unanimous vote
The Central Bank of Brazil reduced the Selic policy rate to 13.75 percent at its September meeting. The Monetary Policy Committee reached a unanimous decision, pointing to gradual economic moderation alongside persistent inflation pressures and unanchored expectations.
Unanimous vote for 13.75 percent
The Monetary Policy Committee (Copom) decided to reduce the benchmark interest rate to 13.75 percent.
The decision was supported unanimously by Governor Gabriel Muricca Galípolo alongside committee members Ailton de Aquino Santos, Gilneu Francisco Astolfi Vivan, Izabela Moreira Correa, Nilton José Schneider David, Paulo Picchetti, and Rodrigo Alves Teixeira.
Baseline inflation projections under the reference scenario stand at 5.2 percent for 2026, 3.9 percent for 2027, and 3.2 percent for the first quarter of 2028.
Market inflation expectations from the Focus survey remain above target at 4.9 percent for 2026 and 4.3 percent for 2027.
Cooling growth meets fiscal friction
Second-quarter gross domestic product confirmed a gradual economic slowdown, primarily in cyclical demand components.
While the labor market remains tight with low unemployment and real wage growth exceeding productivity, free credit growth has decelerated.
Copom highlighted that unanchored inflation expectations require prolonged monetary restriction.
The committee warned that waning fiscal discipline and expanding targeted credit risk elevating the economy's neutral rate.
Easing with one foot on the brake
Copom delivers an easing step while sounding distinctly uneasy about fiscal slippage.
Cutting rates against elevated inflation projections and stubborn survey expectations leaves little margin for error.
Without credible fiscal restraint, the central bank risks having to pause or reverse course prematurely.