Brazil's Monetary Policy Committee (Copom) cut the Selic rate by 0.25 percentage points, from 15% to 14.75% per year, on Wednesday (18). The unanimous decision, the first under Gabriel Galípolo's management, comes despite the escalation of the Middle East conflict, which pushed oil prices above US$ 100 per barrel. The statement stresses caution due to uncertainty over the duration of the war involving the United States, Israel, and Iran.
The Copom announced the Selic cut on March 18, 2026, after holding it at 15% since June 2025, the highest level in nearly two decades. It was the first adjustment under Gabriel Galípolo, who took over in early 2025 succeeding Roberto Campos Neto. The vote was unanimous among 7 of 9 members. Before the Iran war, started on February 28 with US and Israel attacks, markets expected a 0.5 percentage point cut; uncertainty revised expectations to 0.25 points. Oil rose from about US$ 70 to over US$ 100 per barrel, raising inflationary risks. Copom projections show inflation at 3.9% this year and 3.3% in Q3 2027, above the 3% target. The Focus Bulletin forecasts Selic at 12.25% by end-2026. The Fed kept rates between 3.5% and 3.75%. Analysts like Alex Agostini (Austin Rating) note: “The more transparent the Central Bank is, the better it will manage expectations.” Caio Megale (XP) expects a pace of 0.25 points or more. Fiesp and Fiemg criticized the cut as insufficient for industry. Brazil holds the second-highest real rate at 9.51% per year. The statement says: “In the current scenario, characterized by a strong increase in uncertainty, the Committee reaffirms serenity and caution.” Next meeting: April 28-29. The Treasury repurchased R$ 49 billion in bonds to stabilize the market.
