Brazil’s Central Bank has raised the Selic rate by 100 basis points to 14.25% in March 2025 to bring inflation closer to the target. While focusing on price stability, the move aims to lessen economic fluctuations and support full employment. The global economic climate remains challenging, with rising domestic inflation expectations for 2025 and 2026.
In March 2025, Brazil’s Central Bank increased the Selic rate by 100 basis points, raising it to 14.25%. This adjustment aims to align inflation with the established target, reinforcing the Bank’s dedication to maintaining price stability. Additionally, the move seeks to mitigate economic fluctuations and bolster the goal of achieving full employment in the country.
The current global economic landscape presents notable challenges, particularly stemming from uncertainties regarding US trade policies, which have generated fears of an economic slowdown and disinflation. Despite this, central banks in prominent economies persist in their efforts to align inflation rates with their targets, even amidst pressures in the labor markets.
In Brazil’s domestic context, economic and labor market indicators reflect active dynamics, though a moderation in growth is evident. Analysts have noted a significant rise in inflation expectations for the years 2025 and 2026, now projected at 5.7% and 4.5%, respectively. The Central Bank Committee has signaled its intent to remain vigilant and prepared to modify its policy as economic conditions evolve.
The Central Bank of Brazil’s decision to raise the Selic rate to 14.25% underscores its commitment to controlling inflation and fostering economic stability. While grappling with external uncertainties, the Bank remains proactive in its policy approach, indicating adaptability in response to changing economic trends. Enhanced inflation expectations for the coming years further emphasize the necessity for vigilant economic management.
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