The Monetary Policy Committee (Copom) of the Central Bank should reduce the Selic rate by 0.25 percentage points this Wednesday, cutting basic interest rates from 14% to 13.75% per year. If confirmed, it will be the fifth decline of the Selic since March, when the interest rate cutting cycle was initiated. Since then, the BC has maintained the same gradual pace of cuts, totaling up to now 1.0 percentage point of reduction, from 15% to 14%. If the Selic falls to 13.75%, it will reach the lowest level since March 2025.
The Copom calibrates the Selic to achieve the inflation target of 3% per year, with a tolerance margin between 1.5% and 4.5%. At the last meeting, in August, the Central Bank projected that official inflation (IPCA) would only approach the target in the first quarter of 2028, when it would reach 3.2%. For the end of this year, the expectation was 5.1%, above the tolerated ceiling, and for the end of 2027, 3.8%.
