| Consensus | Actual | Previous | |
| Level | 14.50% | 14.75% | 15.0% |
| Change | -50bp | -25bp | 0.0bp |
Highlights
The Copom opted for a 25 basis point rate cut rather than the 50 bps markets expected in a bow to inflation concerns heightened by soaring energy costs due to the Iran war. The rate cut comes in response to slowing economic activity and the bank's view that restrictive policy was adding to the weakness even as the Mideast situation adds to uncertainty about upside inflation risk.
"The Committee deemed it appropriate to begin the monetary policy calibration cycle, insofar as the prolonged period of the Selic at a contractionary level gave enough evidence about monetary policy transmission to the economic deceleration, creating the conditions under which adjustments to the pace of this calibration, in light of new information, can be made so as to ensure convergence to the inflation target," Copom's statement says.