Latest news with #Selic
Reuters
3 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%.
Bloomberg
3 days ago
- Business
- Bloomberg
Brazil Lifts Interest Rate to 15% as Robust Economy Fuels Inflation
By and Andrew Rosati Updated on Save Brazil's central bank raised its key interest rate by a quarter-point, saying it will likely pause its monetary tightening campaign to gauge its impact on inflation and economic activity. Board members led by Gabriel Galipolo lifted the benchmark Selic to 15% in an unanimous decision on Wednesday, as expected by 12 of 32 economists in a Bloomberg survey. The other 20 forecast borrowing costs to remain unchanged 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)
Reuters
29-05-2025
- Business
- Reuters
Brazil's bank lending picks up in April despite tight borrowing costs
BRASILIA, May 29 (Reuters) - Brazilian bank lending accelerated in April despite tight borrowing costs, central bank data showed on Thursday, highlighting the resilience of economic activity even after aggressive monetary tightening. Outstanding credit rose 0.7% from the previous month to 6.6 trillion reais ($1.16 trillion). On a 12-month basis, credit growth picked up to 11.5% from 11.1% in March, driven by a 12.4% increase in household loans. Corporate lending rose 10.2%, faster than the previous month. The expansion came despite a sharp interest rate hiking cycle led by the central bank to cool economic activity and tame inflation. Since September, policymakers have raised the benchmark Selic rate by 425 basis points to 14.75%, its highest level in nearly two decades. On Thursday, the central bank said following its financial stability committee meeting that it had observed mild signs of a slowdown in credit between January and March, both in the banking system and capital markets. Still, it noted that credit growth remains historically high, reflecting economic resilience despite tighter financial conditions. In April, the default rate on non-earmarked loans to businesses and consumers rose to 4.8% from 4.5% in March, while the average spread in the segment jumped to 31.3 percentage points from 29.4 points the month before. ($1 = 5.6870 reais)
Reuters
28-05-2025
- Business
- Reuters
Brazil's debt issuance cost rises to highest level in more than eight years
BRASILIA, May 28 (Reuters) - The average cost of Brazil's domestic debt issuance rose to the highest level in more than eight years, Treasury data showed on Wednesday, as elevated interest rates and persistent inflation continue to weigh on the country's debt profile. The cost reached 13.05% in April, up from 12.61% the previous month and the highest since January 2017. Local currency debt accounts for 96% of the total public debt in Latin America's largest economy. Brazil's debt burden is under pressure from high interest rates - nearly half of the public debt is linked to the Selic rate - as well as persistent inflation, which has long remained above the 3% target, making inflation-linked bonds more expensive. The central bank has raised interest rates by a total 425 basis points to 14.75% since it began a tightening cycle in September to curb sticky inflation. Annual consumer prices reached 5.40% in mid-May. According to Treasury data, Brazil's total public debt stock, including external debt, rose 1.44% in April from the previous month to 7.617 trillion reais ($1.34 trillion). Gross debt issuance totaled 204.6 billion reais, while redemptions reached 164.6 billion reais, resulting in net issuance of 40 billion reais. The debt stock was also impacted by 68.3 billion reais in interest payments, the Treasury said. Year-to-date, Brazil's public debt has increased by 300.6 billion reais, driven by 259.4 billion reais in interest payments and net issuance of 41.2 billion reais. ($1 = 5.6894 reais)
