Brazil Central Bank Holds Selic Rate at 13.75%

The Central Bank of Brazil held its Selic benchmark interest rate at 13.75% on November 4, 2026, ending a cycle of five consecutive quarter-point cuts that began in March. The decision by the Copom monetary policy committee follows the October 25 re-election of President Luiz Inácio Lula da Silva.

Committee members described the current rate as "substantially contractionary," citing a challenging global environment and upside inflation risks. Specifically, Copom noted that prolonged conflicts in the Middle East have driven up oil prices, while tighter monetary policies in advanced economies have created an adverse external environment.

Domestic inflation remains a primary concern, with annual inflation at 4.58% as of September, exceeding the central bank's 4.5% target ceiling. Forecasts for 2026 and 2027 place inflation at 5.2% and 4.8% respectively, both of which surpass the official 3% target.

The hold deviates from the central bank's Focus survey, which had predicted a cut to 13.50% by December 2026. Copom provided no guidance on when rate cuts might resume. While the pause benefits savers earning high yields on reais, it increases costs for borrowers seeking cheaper credit.