Latest news with #Copom
Reuters
4 days ago
- Business
- Reuters
Brazil central bank raises rates by 25 bps in seventh straight hike
BRASILIA, June 18 (Reuters) - Brazil's central bank raised interest rates by 25 basis points on Wednesday, delivering a seventh consecutive hike that defied bets it would hold rates steady, as unanchored inflation expectations and a resilient economy kept policymakers on alert. The bank's rate-setting committee, Copom, unanimously decided to lift the benchmark Selic rate to 15%, the highest since July 2006. A majority of 27 out of 39 economists polled by Reuters had expected the bank to hold rates steady at 14.75%.
Reuters
13-06-2025
- Business
- Reuters
Brazil central bank to hold interest rates at 14.75% on June 18, economists say: Reuters poll
BUENOS AIRES, June 13 (Reuters) - Brazil's central bank is expected to keep its benchmark rate unchanged at 14.75%, its highest in nearly two decades, on June 18 and also remain data-dependent for upcoming decisions, a Reuters poll of economists showed. The consensus view shifted from a poll in May, when a majority of analysts who answered extra questions on the next move by Banco Central do Brasil (BCB) said they expected a 25 basis point hike in June. It would be the first pause after the BCB raised its Selic rate six consecutive times by a total of 425 basis points to its highest since July 2006. At the end of next week's two-day meeting, policymakers will also probably reiterate their concerns about still-elevated inflation, while noting some moderation in consumer prices amid heightened uncertainty. The decision should maintain the considerable spread of more than 10 percentage points over U.S. rates, a gap that has helped strengthen Brazil's currency but is weighing on economic growth. The bank's monetary policy committee, known as Copom, will hold the Selic rate steady, according to a majority of 27 economists of 39 polled June 9-12. Twelve predicted a 25 basis-point increase to 15.00%. "Copom is expected to keep the Selic stable at 14.75% at this meeting, but with a very cautious tone, possibly leaving the doors open to raising rates again in the future," said Robson Pereira, chief economist at Brasilprev. "The statement should acknowledge that since the last meeting, there has been a reduction in the risks of an imminent global recession but also that the level of uncertainty remains very high." Brazil's inflation rate slowed more than forecast last month. However, the 12-month gauge came in at 5.32%, surpassing again the central bank's target of 3% plus/minus a margin of 1.5 percentage points. Last week, Gabriel Galipolo, BCB's governor, said the bank was keeping its options open into June's policy meeting, in line with its decision in May to drop any forward guidance on policy. Asked in the latest survey what the next move would be, all 29 respondents to the extra question called for a rate cut. Ten expected an easing in January 2026, six in December 2025 and the rest in other months. In response to another extra question on the size of the possible reduction in the cost of borrowing, a slight majority of 16 predicted a 25 basis-points cut and the other 13 a half-percentage point move. The Selic will stay at 14.75% until year-end, and then fall to 14.00% in the first quarter of 2026, closing next year at 12.00%, medians in the poll showed. (Other stories from the Reuters global economic poll)
CNBC
07-05-2025
- Business
- CNBC
Brazil central bank hikes rates to near 20-year high, leaves next steps open
The Central Bank of Brazil headquarters in Brasilia, Brazil, on Thursday, Jan. 2, 2025. Brazil's central bank raised interest rates by 50 basis points Wednesday in a sixth straight hike that pushed borrowing costs to their highest in nearly 20 years, and left future steps open amid global uncertainties and sticky domestic inflation. The bank's monetary policy committee, known as Copom, raised the Selic to 14.75% in a unanimous decision, matching forecasts from 32 of 35 economists in a Reuters poll. Policymakers stressed that the current environment calls for a "significantly contractionary monetary policy for a prolonged period" to bring inflation to target, dropping previous language about the need for "a more contractionary" stance. "For the next meeting, the scenario of heightened uncertainty, combined with the advanced stage of the current monetary policy cycle and its cumulative impacts yet to be observed, requires additional caution in the monetary policy action and flexibility to incorporate data that impact the inflation outlook," they added in the decision's statement. Flavio Serrano, chief economist at BMG Bank, said the central bank left the door open for a smaller rate hike in June if needed, though he sees it as unlikely. "My base case is zero increase in June, holding at 14.75%. There may be room for a cut at the very end of the year, depending on how the outlook evolves," he said. In March, the central bank had already flagged the need for further tightening this month, though at a slower pace than the previous three 100 basis-point hikes. With Wednesday's move - announced just hours after the U.S. Federal Reserve held rates steady but cited the risk of rising inflation and unemployment - the Selic benchmark rate has now reached its highest level since August 2006. The sky-high rates come against a backdrop of a 5.49% annual inflation rate, well above the official 3% goal, with markets skeptical that inflation will return to target even by as far out as 2028. The aggressive tightening has added 425 basis points to the benchmark rate since September, but policymakers stressed on Wednesday they observe "an incipient moderation in growth," with indicators of domestic economic activity and the labor market still exhibiting strength. GLOBAL UNCERTAINTIES Now, however, the inflation risk balance is no longer described as tilted to the upside, but rather as featuring higher-than-usual risks on both sides - including a new disinflationary risk tied to falling commodity prices. "Indeed, the external scenario points to a greater disinflationary outlook than previously expected, which could support a pause in monetary tightening as early as June," said Rafaela Vitoria, chief economist at lender Inter. Global uncertainties, triggered by sweeping U.S. trade tariffs that have clouded the outlook for the world's largest economy, have led Copom members to emphasize the need for greater caution and flexibility in remarks ahead of the decision. The current environment, they previously argued, not only limits their ability to provide any guidance but also requires policymakers to consider a broader and diverse set of data to assess whether monetary policy is achieving its intended effects. Their concern about the trajectory of Latin America's largest economy came despite some favorable inflationary developments since the Brazilian central bank's latest policy meeting, including a stronger currency BRBY and lower commodity prices. On the other hand, the government of President Luiz Inacio Lula da Silva has unveiled new stimulus measures, such as changes to rules governing payroll-deductible loans, as it struggles to reverse a plunge in the leftist leader's approval ratings. Considering changes in macroeconomic conditions, Brazil's central bank on Wednesday lowered its 2025 inflation forecast to 4.8%, down from 5.1% projected in March. For the fourth quarter of 2026, the period most influenced by current monetary policy decisions, the bank now projects the 12-month inflation rate to reach 3.6%, down from 3.7% estimated in the quarterly monetary policy report released late March.
Yahoo
07-05-2025
- Business
- Yahoo
Brazil central bank hikes rates to near 20-year high, leaves next steps open
By Marcela Ayres BRASILIA (Reuters) -Brazil's central bank raised interest rates by 50 basis points on Wednesday in a sixth straight hike that pushed borrowing costs to their highest in nearly 20 years, and left future steps open amid global uncertainties and sticky domestic inflation. The bank's monetary policy committee, known as Copom, raised the Selic to 14.75% in a unanimous decision, matching forecasts from 32 of 35 economists in a Reuters poll. "For the next meeting, the scenario of heightened uncertainty, combined with the advanced stage of the current monetary policy cycle and its cumulative impacts yet to be observed, requires additional caution in the monetary policy action and flexibility to incorporate data that impact the inflation outlook," policymakers said in the statement from the decision. In March, the central bank had already flagged the need for further tightening, though at a slower pace than the previous three 100 basis-point hikes. With Wednesday's move - announced just hours after the U.S. Federal Reserve held rates steady but cited the risk of rising inflation and unemployment - the Selic benchmark rate has now reached its highest level since August 2006. The sky-high rates come against a backdrop of a 5.49% annual inflation rate, well above the official 3% goal, with markets skeptical that inflation will return to target even by as far out as 2028. The aggressive tightening has added 425 basis points to the benchmark rate since September, but policymakers stressed on Wednesday they observe "an incipient moderation in growth," with indicators of domestic economic activity and the labor market still exhibiting strength. Global uncertainties, triggered by sweeping U.S. trade tariffs that have clouded the outlook for the world's largest economy, have led Copom members to emphasize the need for greater caution and flexibility in remarks ahead of the decision. The current environment, they argued, not only limits their ability to provide any guidance but also requires policymakers to consider a broader and diverse set of data to assess whether monetary policy is achieving its intended effects. Their concern about the trajectory of Latin America's largest economy came despite some favorable inflationary developments since the Brazilian central bank's latest policy meeting, including a stronger currency and lower commodity prices. On the other hand, the government of President Luiz Inacio Lula da Silva has unveiled new stimulus measures, such as changes to rules governing payroll-deductible loans, as it struggles to reverse a plunge in the leftist leader's approval ratings.
Reuters
07-05-2025
- Business
- Reuters
Brazil central bank hikes rates to near 20-year high, leaves next steps open
BRASILIA, May 7 (Reuters) - Brazil's central bank raised interest rates by 50 basis points on Wednesday in a sixth straight hike that pushed borrowing costs to their highest in nearly 20 years, and left future steps open amid global uncertainties and sticky domestic inflation. The bank's monetary policy committee, known as Copom, raised the Selic to 14.75% in a unanimous decision, matching forecasts from 32 of 35 economists in a Reuters poll. "For the next meeting, the scenario of heightened uncertainty, combined with the advanced stage of the current monetary policy cycle and its cumulative impacts yet to be observed, requires additional caution in the monetary policy action and flexibility to incorporate data that impact the inflation outlook," policymakers said in the statement from the decision. In March, the central bank had already flagged the need for further tightening, though at a slower pace than the previous three 100 basis-point hikes. With Wednesday's move - announced just hours after the U.S. Federal Reserve held rates steady but cited the risk of rising inflation and unemployment - the Selic benchmark rate has now reached its highest level since August 2006. The sky-high rates come against a backdrop of a 5.49% annual inflation rate, well above the official 3% goal, with markets skeptical that inflation will return to target even by as far out as 2028. The aggressive tightening has added 425 basis points to the benchmark rate since September, but policymakers stressed on Wednesday they observe "an incipient moderation in growth," with indicators of domestic economic activity and the labor market still exhibiting strength. Global uncertainties, triggered by sweeping U.S. trade tariffs that have clouded the outlook for the world's largest economy, have led Copom members to emphasize the need for greater caution and flexibility in remarks ahead of the decision. The current environment, they argued, not only limits their ability to provide any guidance but also requires policymakers to consider a broader and diverse set of data to assess whether monetary policy is achieving its intended effects. Their concern about the trajectory of Latin America's largest economy came despite some favorable inflationary developments since the Brazilian central bank's latest policy meeting, including a stronger currency and lower commodity prices. On the other hand, the government of President Luiz Inacio Lula da Silva has unveiled new stimulus measures, such as changes to rules governing payroll-deductible loans, as it struggles to reverse a plunge in the leftist leader's approval ratings. Considering changes in macroeconomic conditions, Brazil's central bank on Wednesday lowered its 2025 inflation forecast to 4.8%, down from 5.1% projected in March. For the fourth quarter of 2026, the period most influenced by current monetary policy decisions, the bank now projects the 12-month inflation rate to reach 3.6%, down from 3.7% estimated in the quarterly monetary policy report released late March.
