Brazil's Central Bank Maintains Interest Rate at 15 Percent Amid Economic Uncertainty

Brazil's Central Bank Holds Benchmark Interest Rate at 15%, signaling cautious monetary policy amidst economic uncertainties. In a unanimous decision, the Monetary Policy Committee, comprising the bank's board members, confirmed the maintenance of the Selic rate at 15%, aligning with analyst expectations. The committee emphasized the importance of prudence given the current high levels of economic unpredictability. While indicating a pause in interest rate hikes, they committed to monitoring the cumulative effects of previous monetary tightening on inflation control. The official statement highlighted Brazil's resilient economy, bolstered by a tight labor market, yet acknowledged ongoing risks such as rising fiscal deficits and currency fluctuations. Inflation targets remain unmet, with external factors like slowing global growth, trade tensions, and commodity price volatility posing additional challenges, potentially leading to imported deflation. Regarding the recent U.S. tariffs on Brazilian exports, the Central Bank announced it will closely observe the potential impact of these measures on Brazil's economy, particularly concerning inflation and trade dynamics.