Copom reduces Selic rate to 14.75% per year.

This Wednesday (18), the Monetary Policy Committee (Copom) of Central Bank (BC) cut by 0.25 percentage points Brazil's basic interest ratea Selic, to 14.75% per year – the reduction was in line with the majority market expectation.

The decision was unanimous among the voting members and interrupted the cycle of five consecutive maintenances. The minutes of today's meeting will be released next Tuesday (24). 

In a statement, the Copom emphasized that the The external environment has become more uncertain due to the escalation of geopolitical conflicts in the Middle East, with repercussions on global financial conditions. "This scenario demands caution from emerging countries in an environment marked by increased volatility in asset and commodity prices," it states. Regarding the domestic scenario, the set of indicators continues to show, as expected, a trajectory of moderation in economic activity growth, while the labor market still shows signs of resilience. In the most recent releases, headline inflation and underlying measures continued to show some cooling, but remained above the inflation target. For the next meeting, which will take place on April 28 and 29, the Committee points out that it is necessary to "incorporate new information that increases clarity on the depth and extent of the conflicts in the Middle East, as well as their direct and indirect effects on the price level over time."

This text was translated by machine from Brazilian Portuguese.