Brazil's Monetary Policy Committee (Copom) cut the Selic benchmark interest rate by 25 basis points to 14.75 per cent on 18 March 2026, the Banco Central do Brasil's first rate reduction since May 2024 and the start of an easing cycle.
The committee had raised the Selic to 15 per cent in June 2025 and left it there at five consecutive meetings, in July, September, November and December 2025 and in January 2026, before deciding on the March cut.
At the December 2025 meeting, when the rate was held for the fourth consecutive time, the committee voted unanimously to keep the Selic at 15 per cent, saying the scenario involved great uncertainty that required caution in monetary policy and that it would remain vigilant. It gave no timeline for rate cuts at that stage. The January 2026 meeting, held on 27 and 28 January, also left the rate at 15 per cent.
INFLATION MOVES CLOSER TO TARGET
Copom said the decision was consistent with its strategy of bringing inflation back to the target. Consumer price inflation, measured by the IPCA index, stood at 3.81 per cent over the 12 months to February 2026, with prices rising 0.70 per cent in February alone. Inflation ended 2025 at 4.26 per cent, down from 4.83 per cent in 2024. The median market forecast for inflation in 2026 stood at 3.99 per cent.
The committee also noted that the external environment had become more uncertain because of the intensification of geopolitical conflicts in the Middle East.
PACE TO DEPEND ON DATA
Copom did not rule out further reductions but made clear that the pace of easing would depend on incoming data. The cut came against a backdrop of slowing activity: Brazil's economy grew by 2.3 per cent in 2025, compared with 3.4 per cent in 2024.
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