Brazil apex bank to keep rates at 13.75%

In order to dampen inflation expectations for the coming year, the Brazilian central bank is expected to maintain its benchmark rate at a cycle high of 13.75 percent on Wednesday.

It would mark the first rest period in a campaign of tightening that has seen the Selic rate rise by a total of 1,175 basis points since the beginning of 2021, when Brazil was already experiencing the acute inflation pains that are currently afflicting the world’s major economies.

A majority of 24 out of 32 analysts surveyed between September 12 and 15 predicted that the Bank’s Monetary Policy Committee, or Copom, will leave the Selic at 13.75 percent. Eight individuals experienced a 25 basis point increase to 14.0 percent.

Policymakers in Brazil are less inclined to adopt the more stringent stance taken by the U.S. Federal Reserve as price increases are starting to slow down. Before the presidential election in October, they are also cautious to take actions that could cause disruptions.

Roberto Campos Neto, the head of the central bank, however, struck a wary tone when he said last week that his first objective was still bringing inflation down to the predetermined levels.

“Copom will signal it is going to maintain the Selic unchanged until August, keeping a good spread over international rates and advantageous real rate levels too,” said Jason Vieira, chief economist at Infinity Asset Management.