Brasilia: Brazil’s central bank maintained its benchmark interest rate at 15 percent on Wednesday as part of its ongoing efforts to control inflation, which continues to exceed target levels. The decision comes amidst a backdrop of global economic challenges and internal fiscal pressures.
According to Bangladesh Sangbad Sangstha, the bank has kept the interest rate at this level since July, following a series of seven consecutive hikes. This rate remains one of the highest globally, reflecting the bank’s “cautious” approach due to the “high uncertainty” caused by tariffs imposed by the United States on certain Brazilian goods.
Inflation in Brazil has shown signs of deceleration in recent months, but it saw a slight uptick in September, reaching 5.17 percent year-on-year. This figure surpasses the upper limit of the official target rate of 4.5 percent. While food prices have decreased for the fifth consecutive month, sectors such as energy continue to exert upward pressure on inflation.
The decision represents a setback for the administration of leftist president Luiz Inacio Lula da Silva, who has persistently advocated for a rate cut to stimulate Latin America’s largest economy. Despite this, financial institutions surveyed by the central bank have adjusted their 2025 inflation forecast downward to 4.55 percent, with most anticipating that the benchmark interest rate will remain at 15 percent until late this year or early 2026.
Brazil’s economy is projected to expand by 2.4 percent this year, which is higher than initial expectations but marks a decline from the 3.4 percent growth recorded in 2024, according to the International Monetary Fund’s estimates released in October.