Brazil central bank cuts rates by 25 bps at fourth straight meeting

Key facts

• Brazil's central bank cut its benchmark Selic rate by 25 basis points.
• The Selic rate now stands at 14.00%.
• This is the fourth consecutive meeting where the central bank has lowered interest rates.
• Annual inflation in Brazil slowed to 4.52% in the 12 months through mid-July.

Brazil's central bank lowered its benchmark Selic rate by 25 basis points to 14.00% on Wednesday, marking the fourth consecutive policy meeting with a rate cut. The decision was unanimous and aligned with analyst expectations. This move continues the bank's easing cycle, supported by recent data showing slower inflation and a cooling economy. Bank CEOs Marcelo Noronha of Bradesco and Milton Maluhy Filho of Itau Unibanco expressed expectations for further rate cuts, noting that the central bank's restrictive policy has successfully driven down inflation. Annual inflation in Latin America's largest economy slowed to 4.52% in the 12 months through mid-July, approaching the central bank's target. High interest rates, while beneficial for banks, have also contributed to increased household debt and slowed economic activity. Brazil last saw single-digit borrowing costs in early 2022.