Brazil’s Central Bank Ends Run of Rate Cuts After Lula Election Win
Policymakers paused after a market sell-off and inflation stayed above the 4.5% ceiling, with the next meeting set for December.
- On Wednesday, November 4, 2026, the central bank's rate-setting committee, Copom, unanimously held the benchmark Selic interest rate at 13.75%, pausing a series of five consecutive cuts.
- Market volatility following President Luiz Inácio Lula da Silva's re-election on October 25 prompted the committee to pause its easing cycle amid fiscal sustainability and inflation concerns.
- Consumer prices rose 4.58% in the 12 months to September, according to IBGE, Brazil's statistics agency, while household debt hit a record 50.1% of annual income.
- Economists raised their 2027 inflation forecast to 4.76% from 4.34% following the election, though the government argues spending cuts should focus on budget earmarks.
- Polymarket data from November 4 indicates a 73.0% probability of no change at the December 9 meeting, serving as a critical test for the bank's future easing path.
62 Articles
62 Articles
Brazil pauses rate cuts as rising debt and fiscal pressure threaten to keep borrowing costs high
Brazil's Copom unanimously kept the Selic rate at 13.75%, ending five consecutive cuts as rising public debt, fiscal deficits and investor concerns cloud the outlook for further easing.
After its two-day meeting, the Monetary Policy Committee (Copom) unanimously maintained the Selic rate at 13.75%, one of the highest in the world. Lula, who abruptly defeated conservative Senator Flávio Bolsonaro in the balloting of October 25, will begin his fourth term with promises of social benefits, in a context of fiscal deterioration. Markets, which expected a victory from the right, accused the coup. Last week, the real and the Sao Paulo…
Central Bank of Brazil maintains Selic rate at 13.75 percent amid inflation concerns
The São Paulo Industry Federation (Fiesp) has sharply criticized the Central Bank of Brazil for halting its interest rate easing cycle. The decision by the Monetary Policy Committee (Copom) to maintain the Selic benchmark rate at 13.75% per annum interrupted a streak of five consecutive cuts that had begun in March 2026. During that period, the rate had fallen from 15% to the current level. The Central Bank cited rising inflation expectations an…
The Central Bank's Monetary Policy Committee maintained its policy rate at 13.75%. Lula's re-election led to severe market turbulence: the Sao Paulo Stock Exchange suffered heavy lossesThe Central Bank of Brazil interrupted a cycle of reduction of its policy rate on Wednesday, after the re-election of left-wing President Lula. The Central Bank's Monetary Policy Committee (Copom) maintained its policy rate at 13.75%, the main tool for controlling…
Brazil's central bank ends run of rate cuts after Lula election win
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