Central Bank maintains benchmark rate at 6.5% p.a.

For the third meeting in a row, the Central Bank has kept the basic interest rate at 6.5% p.a., the lowest since 1999. The decision was made on the afternoon and announced earlier in the evening of Wednesday (1 August).

Called SELIC in Brazil, the benchmark interest rate is an important tool for controlling inflation and significantly influences rates charged to consumers and businesses in financial transactions.

According to a statement released after the meeting of the Central Bank board (called COPOM) that decided to maintain the rate, the decision was unanimous. It also says that the current assessment is that the Brazilian economy is still recovering at a gradual pace.

Inflation Target

The COPOM explained in the statement that the outlook for inflation is that it will stay within the target brackets. The goal this year is for the Broad Consumer Price Index (IPCA), Brazil's official inflation rate, to remain within a 1.5% range of the core target of 4.5% (i.e. it can be allowed to vary from 3% to 6% and stay within target).