Brazil’s central bank kept its benchmark interest rate at 15 per cent on Wednesday amid ongoing efforts to contain inflation, which remains above target rates.

The bank has kept the interest rate at that level — one of the highest in the world — since July, after a series of seven straight hikes.

In a note, the bank’s Monetary Policy Committee (COPOM) said its “cautious” stance was due to “high uncertainty” posed by tariffs imposed by the United States on certain Brazilian goods.

Inflation in Brazil has shown signs of slowing in recent months, although it increased slightly in September to 5.17 per cent year-on-year, surpassing the upper limit of the official target rate of 4.5 per cent.

Food prices fell for a fifth consecutive month, but other sectors like energy have put continued pressure on inflation.

The decision was a blow to the government of leftist president Luiz Inacio Lula da Silva, who has continually called for a rate cut to help stimulate Latin America’s largest economy.

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Financial institutions consulted by the central bank lowered their 2025 inflation forecast to 4.55 per cent, with most expecting the benchmark interest rate to remain at 15 per cent until the end of this year or the beginning of 2026.

Brazil’s economy is expected to grow 2.4 per cent this year, higher than expected, although a marked decrease from the 3.4 per cent growth recorded in 2024, according to estimates published by the International Monetary Fund in October.

AFP

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