By Paulo Trevisani and Nicholas G. Miller
Brazil's central bank cut interest rates for the fourth consecutive time as inflation cools and still-elevated borrowing costs weigh on the economy.
The bank's monetary committee, or Copom, cut the Selic benchmark lending rate to 14% from 14.25% on Wednesday, as expected. But the monetary authority indicated that uncertainty around its inflation projections remains higher than usual, especially given conflicts in the Middle East.
"The global environment remains uncertain due to the lack of definition regarding the armed conflicts in the Middle East and uncertainty surrounding monetary policy in some advanced economies," Copom said. "Without compromising its fundamental objective of ensuring price stability, this decision also implies smoothing economic fluctuations and fostering full employment."
Inflation was 4.5% in the 12 months through mid-June, slowing from 4.8% in the previous period. The central bank targets 3%, with a tolerance range of 1.5 percentage points. Analysts surveyed weekly by the monetary authority forecast inflation ending 2026 at 5%.
