Central Bank of Brazil Lowers Selic Rate to 14 Percent

The Central Bank of Brazil lowered the Selic interest rate by 25 basis points to 14 percent on August 5, 2026. This action represents the fourth consecutive rate cut since March, totaling 100 basis points of monetary easing. The decision follows benign inflation reports from early July and observed moderation in broader economic activity.

Despite the reduction, policymakers are maintaining a cautious stance because consumer price forecasts for the first quarter of 2028 remain above the 3 percent target. The board continues to monitor global risks, specifically volatile energy markets resulting from conflict in the Middle East and the potential for rising food costs driven by El Niño weather patterns.

The bank is avoiding forward guidance regarding future moves. Officials stated they remain data-dependent to determine whether further easing will occur beyond the August meeting.