Brazil's monetary policy committee, Copom, raised the Selic benchmark interest rate by 25 basis points to 15.00% at its June 2025 meeting, the Banco Central do Brasil confirmed in a statement published on its website. The increase, which Copom said it expects to be followed by a pause in the tightening cycle, takes Brazil's policy rate to its highest level since July 2006. The committee signalled that it expects to maintain rates at 15.00% for an extended period before considering any adjustment in either direction.
The committee cited de-anchored inflation expectations, elevated inflation projections, resilient economic activity and labour-market pressures.
FORWARD GUIDANCE
The committee accompanied the increase with guidance that, if its expected scenario is confirmed, it anticipates interrupting the hiking cycle to examine the cumulative effects of the adjustment and assess whether holding the current rate for a very prolonged period is sufficient to bring inflation back to target, while stressing it would not hesitate to resume hikes if appropriate.