Brazil Central Bank pauses rate after seven consecutive hikes
Brazil’s Central Bank pauses seven‑step rate hike spree
The Selic benchmark stays at 15 % after a string of consecutive increases, leaving the country’s biggest economy facing a potential slowdown amid a political clash with the U.S.
Key points
- Rate level: 15 %, the highest since 2006 and among the world’s most elevated.
- Policy motive: Counteract inflation after a series of seven successive hikes.
- External pressure: U.S. President Donald Trump imposed a 50 % tariff on Brazilian goods, adding further risk for the South‑American economy.
- Political backdrop: President Luiz Inacio Lula criticises high interest rates for stifling growth.
Central Bank announcement
The monetary authority confirmed that the Selic rate will remain unchanged, citing the need for stability in the face of heightened geopolitical tensions and adverse external conditions linked to the United States.1
Implications for Brazil’s trade ties
The tariff measures and sanctions applied by Trump are characterised by explicit political terms, bypassing longstanding trade relationships and a 284‑million‑dollar surplus recorded by Brasília last year.2
For Brazil’s economic outlook, the pause in rate hikes may provide a brief respite from inflation pressures while geopolitical tensions converge on the world stage.
