Selic held at 13.75 percent as inflation forecasts rise
Brazil's central bank held the Selic rate at 13.75 percent unanimously. Copom said unanchored inflation expectations require tighter monetary conditions for longer, despite clearer signs of slowing domestic activity.
Seven votes to maintain restraint
The Central Bank of Brazil's monetary policy committee (Copom) held the Selic at 13.75 percent at its November 3–4, 2026 meeting.
Its reference scenario projects inflation of 5.6 percent in 2026, 4.7 percent in 2027 and 3.5 percent in Q2 2028, the policy horizon.
Market-price inflation projections are 5.5, 4.8 and 3.4 percent, respectively; administered-price projections are 6.0, 4.2 and 3.9 percent.
All seven members supported the decision: President Gabriel Muricca Galípolo, Ailton de Aquino Santos, Gilneu Francisco Astolfi Vivan, Izabela Moreira Correa, Nilton José Schneider David, Paulo Picchetti and Rodrigo Alves Teixeira.
Copom said maintaining the rate supports inflation convergence while smoothing activity fluctuations and fostering full employment.
Four shocks complicate disinflation
Focus survey inflation expectations rose to 5.2 percent for 2026 and 4.8 percent for 2027.
Copom identified four supply shocks: higher oil prices from Middle East conflicts, El Niño effects on farming and energy, labor costs from ending the six-days-on, one-day-off work schedule and currency depreciation linked to domestic political uncertainty.
Headline and underlying inflation exceeded the target tolerance ceiling over 12 months.
Activity slowed, particularly in credit-sensitive sectors; real wages still outpaced productivity.
Second-round effects remain the test
Copom said it would not counter the first-round effects of supply shocks.
It would respond firmly if second-round effects materialized, while weaker demand may limit their spread.
Inflation risks remain tilted upward, and fiscal uncertainty can weaken monetary transmission.