Central Bank keeps Selic at lowest level in history

For the sixth consecutive time, the Central Bank maintained Brazil's benchmark interest rate (Selic) unchanged at 6.5% per year, the lowest ever. The decision was unanimously adopted on Wednesday (12 December). This was the last meeting this year of the COPOM, a group formed by members of the Central Bank. The next one is scheduled for February next year.

According to the statement released after the ruling, inflation remains at appropriate or comfortable levels. The text mentions that the financial market is projecting an  Broad Consumer Price Index (IPCA) in the coming years, always within the inflation target pursued by the Central Bank.

For the Bank, the Brazilian economy has also improved and is showing gradual recovery. He also says that continued economic reforms are essential for inflation to remain low in the medium and long terms.

How does the COPOM work?

The Selic is determined by the Central Bank board in a complex, closed meeting, where a large volume of information is reviewed. Any definition about decreases, maintenance or increases of interest rates in the country depends on seven directors and the president of the institution. Only they can vote to set the rate.

The body made up by the Central Bank board members to decide on the Selic is called the Monetary Policy Committee (Copom). This meeting occurs eight times a year, more or less every 45 days.