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The Selic Stays at 15% After Copom Decision. The Central Bank Warns of Fiscal Risks and High Inflation, Maintaining High Basic Interest Rates.
The Central Bank decided, on this Wednesday (11/05/2025), to maintain the basic interest rates of the economy (Selic) at 15% per year, the highest level in 19 years.
The decision, taken unanimously by the Monetary Policy Committee (Copom), reflects the strategy of maintaining a cautious stance in light of increased internal and external uncertainties.
This is the third consecutive meeting in which the monetary authority chose not to change the rate, keeping open the possibility of a new increase if the inflationary scenario deteriorates.
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According to the official announcement, the Copom, led by President Gabriel Galípolo, stated that the monetary policy will remain restrictive for a “considerably prolonged” period, until there is convergence of inflation to the target set by the government.
Inflation Still Concerns and Selic Will Remain High
In the text released after the meeting, the Central Bank highlighted that the global scenario still presents high uncertainty, especially due to the economic policy of the United States and international geopolitical tensions.
These factors have impacted financial conditions and require caution in the management of basic interest rates by emerging countries, such as Brazil.
The institution also drew attention to the resilience of the labor market and the behavior of domestic prices.
Despite a slight slowdown, inflation still remains above the target. The projection for the official index for this year fell from 4.8% to 4.6%, while expectations for 2026 and 2027 remain at 3.6% and 3.3%, respectively.
Central Bank Maintains Tight Monetary Policy
The Copom reiterated that it will not hesitate to raise interest rates again if deemed necessary to control inflation growth. The announcement emphasizes:
“The current scenario, marked by high uncertainty, demands caution in the conduct of monetary policy. The Committee assesses that the strategy of maintaining the current interest rate level for a considerably prolonged period is sufficient to ensure the convergence of inflation to the target.”
This stance reinforces the Central Bank’s commitment to price stability, even if it represents a temporary slowdown in economic activity.
Expectations and Risks for the Coming Months
According to the monetary authority, inflationary risks remain high. Among the main pressure factors are the potential uncoupling of market expectations, the persistence of service inflation, and the influence of fiscal and currency policies that may raise domestic prices.
On the other hand, the Central Bank also acknowledges downside risks, such as a sharper slowdown of the Brazilian or global economy and the decline in commodity prices, which could help ease inflation.
The market expectations — measured by the Focus bulletin — indicate that inflation is expected to end 2025 at 4.5% and 2026 at 4.2%, still above the center of the official target of 3%.
Fiscal Policy and Impact on the Financial Market
The Copom stated it is attentive to the trade tariffs imposed by the United States on Brazil and the developments of the domestic fiscal policy, which may interfere with interest rate management and financial assets.
The combination of high public spending and external pressures may hinder the process of sustained inflation decline, justifying the maintenance of the Selic at high levels.
Directors Maintain Consensus and Reinforce Vigilance
The decision to maintain the basic interest rate at 15% was signed by the nine committee members, including President Gabriel Galípolo, and directors Ailton de Aquino Santos, Diogo Abry Guillen, Gilneu Astolfi Vivan, Izabela Corrêa, Nilton David, Paulo Picchetti, Renato Brito Gomes, and Rodrigo Teixeira.
The consensus within the Central Bank demonstrates the alignment around a conservative monetary policy aimed at economic stability and inflation control amid a challenging political and fiscal scenario.
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Uma pessoa reagiu a isso.