Brazil’s central bank has kept its benchmark interest rate at 15 percent, one of the highest levels worldwide, in an effort to control inflation. The decision, announced on Wednesday, comes amid ongoing attempts to bring inflation within target levels. The rate has remained unchanged since July, after a series of seven consecutive hikes.
The Monetary Policy Committee (COPOM) cited “high uncertainty” stemming from U.S. tariffs on certain Brazilian goods as the reason for its cautious stance. Although inflation in Brazil has shown signs of slowing in recent months, it rose slightly to 5.17 percent year‑on‑year in September, exceeding the upper limit of the official target of 4.5 percent. Food prices have fallen for the fifth month in a row, but other sectors, such as energy, continue to pressure inflation.
The move is viewed as a setback for President Luiz Inácio Lula da Silva’s government, which has been advocating for a rate cut to stimulate Latin America’s largest economy. Financial institutions consulted by the central bank have lowered their 2025 inflation forecast to 4.55 percent, with most expecting the benchmark rate to stay at 15 percent until the end of this year or early 2026.
Brazil’s economy is projected to grow 2.4 percent this year, higher than previously expected but down from the 3.4 percent growth recorded in 2024, according to International Monetary Fund estimates published in October. Maintaining the high interest rate underscores the central bank’s priority of controlling inflation over spurring economic growth. Investors and policymakers will be watching closely as Brazil navigates these challenges, and the decision sets the stage for the country’s economic trajectory in the coming months.
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