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2026-09-17 07:46:09
[Brazil's Central Bank Cuts Interest Rates for Fifth Consecutive Time to 13.75%, Economic Slowdown but Oil Prices and Inflation Expectations a Concern] (1) Brazil's central bank cut interest rates for the fifth consecutive time on Wednesday by 25 basis points, lowering the Selic rate to 13.75%, in line with market expectations; since the start of the easing cycle in March, it has cumulatively cut rates by 125 basis points. (2) The statement said that Brazilian economic activity is gradually slowing down, especially in cyclical industries, but overall it remains resilient; inflationary pressures have eased somewhat, but the labor market remains tight. (3) The renewed conflict in the Middle East has pushed up oil prices, becoming a new concern; market expectations for inflation next year have risen slightly, further deviating from the 3% target. Brazil's central bank has raised its inflation forecasts for 2026 and 2027 to 5.2% and 3.9%, respectively. (4) Investors are focused on the next meeting in early November, after the second round of the presidential election; if the economy continues to cool down and the inflation trend is good, it may continue to cut rates by 25 basis points each time. The 18-month outlook for inflation to the first quarter of 2028 remains unchanged at 3.2%.
