LatinNews Regional Monitor: Brazil & Southern Cone - 01 June 2017

The central bank (BCB) has cut its benchmark Selic interest rate by one percentage point to 10.25%. This is the BCB’s sixth consecutive Selic rate cut, meaning that Brazil’s interest rates at are their lowest level since 2014. The BCB’s monetary policy committee (Copom) justified its decision due to favourable inflation rates. However, Copom highlighted “an increase in uncertainty about the speed of economic reforms” in the country as a major risk factor which could affect the pace of any further cuts. This could cause the Brazilian government to miss its objective of reducing the Selic to 8.5% by the end of the year.

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