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Central Bank keeps annual basic interest rate at 6.5%

INTEREST RATE

This was the fifth consecutive meeting in which the institution decided to leave the rate unchanged
published: Nov 05, 2018 03:37 PM last modified: Nov 05, 2018 03:37 PM
Antonio Cruz/Agência Brasil Central Bank building in Brasilia. Decision was unanimous

Central Bank building in Brasilia. Decision was unanimous

For the fifth consecutive meeting, the Central Bank Monetary Policy Committee (COPOM) has decided to keep the basic interest rate unchanged at 6.5% per year, the lowest level since 1999. The decision was taken on Wednesday (31 October) afternoon and announced in the early evening. 

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

According to the statement released by the board of the institution after the meeting, the decision was unanimous. The assessment reached was that inflation is at an appropriate level and in line with the current economic cycle, the statement said. 

Inflation Target 

The forecast by the Central Bank is that inflation will stay within the target set for the government, which is to pursue a Broad Consumer Price Index (IPCA, the official inflation index) rate of 4.5% at the end of the year. The inflation target regime has a 1.5% built-in tolerance margin, meaning inflation can vary from 3% to 6% and still stay within target.