Brazil Central Bank Statement on Interest Rate Decision (Text)

Following is a translation of the statement by Brazil’s central bank on its interest rate decision today.

“The Copom decided to reduce the Selic rate to 12 percent a year, without a bias, by a vote of five in favor and two votes for holding the Selic at 12.50 percent a year. Re-evaluating the international scenario, the Copom considers there was a substantial deterioration consisting of, for example, a generalized reduction of great magnitude in the growth projections for the principal economic blocs. The committee understands that there was an increase in the chance that the restrictions to which various advanced economies are exposed today becomes prolonged for a longer-than-expected time period. It also notes that, in these economies, the space to use monetary policy is limited and the outlook is one of fiscal restrictions. In this way, the Committee evaluates that the international scenario shows a disinflationary bias in the relevant time period.