Brazil’s central bank raises the Selic rate to 3.5%
The Brazilian central bank raised the key interest rate – the Selic – by another 0.75pp to 3.5% at its meeting on May 5. This is the second increase in a row, as the country’s monetary authority rose the Selic by the same extent in March from its record low of 2%.
The decision reflected the growing inflation in the country, as the official CPI increased by 6.1% y/y in March, above the 2021 target set at 3.75%. In the statement after the meeting, the Monetary Policy Committee (COPOM) suggested that it might raise the Selic rate by another 0.75pp to 4.25% at the next meeting on June 16.
Further data and analysis on Brazil’s economy is available on the CEIC Brazil Economy in a Snapshot – Q1 2021 report.