Brazil central bank delivers fifth straight rate cut, leaves next move open
Brazil's central bank, the Boao, cut its benchmark interest rate by 25 basis points to 13.75% in its fifth consecutive rate reduction meeting on Wednesday. The move came amid signs of an economic slowdown and in advance of the upcoming presidential election. The Central Bank’s Monetary Policy Committee (Copom) unanimously agreed to the rate cut, with 48 of 51 economists surveyed by Reuters predicting a similar decision.
The central bank reiterated that future adjustments to the calibration cycle will depend on new information aimed at ensuring inflation reaches the target. The decision to maintain the easing cycle, despite rising oil prices and a shift in market inflation expectations, leaves Copom's next move open. The bank has already cut interest rates by 125 basis points since March, resulting in one of the highest real interest rates among major economies.
Investors now anticipate Copom’s decision at its meeting in early November, just after the closely contested election runoff between President Luiz Inacio Lula da Silva and Senator Flavio Bolsonaro.
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