Brazil’s Central Bank Sees 5.6% Inflation
Brazil's central bank forecasts 5.6% inflation for 2026 after holding the Selic at 13.75%, and says rates must stay tight for longer. The post Brazil’s Central Bank Sees 5.6% Inflation appeared first on The Rio Times .
Brazil's central bank, known as Copom, has signaled that it will maintain tighter monetary policy for an extended period due to higher-than-target inflation. The bank's forecast for 2026 is 5.6% inflation, surpassing the official limit of 4.5%, according to minutes from its November 3-4 meeting. Copom kept the Selic interest rate at 13.75% on November 4, pausing a series of cuts.
The bank attributes rising inflation to four supply shocks: higher oil prices, El Niño weather patterns, the end of Brazil's 6×1 work schedule, and a weakening Brazilian real. Copom expects inflation to drop to 3.5% in the second quarter of 2028, but this still exceeds the bank's 3% target. The central bank emphasizes that when expectations diverge from the target, tighter and longer-term monetary measures are necessary.
They anticipate continued economic challenges from geopolitical tensions and monetary policy in advanced economies.
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