A survey conducted by Reuters indicated that the Brazilian central bank is likely to keep the benchmark interest rate at 15% during its upcoming meeting on July 30, which is the highest level the country has seen in two decades.
The Brazilian central bank surprised markets last month with an unexpected increase in the Selic interest rate by 25 basis points, but at the same time indicated that this increase would be followed by a "long-term pause," reinforcing markets' belief in the stability of monetary policy in the near term.
According to the survey, all 35 analysts surveyed between July 21 and 25 agreed that the Brazilian central bank would not change the interest rate this month.
Regarding future trends, thirty analysts participating in an additional question suggested that the next move will be a cut in interest rates, in light of signs of slowing economic growth in the country.
Analysts' expectations for the timing of the first interest rate cut were varied, ranging from December to January and March, while others indicated different months next year. In terms of the size of the cut, 17 analysts expected it to be 50 basis points, while 12 analysts anticipated a reduction of 25 basis points.
At the same time, economists revised their inflation estimates for 2026, according to a survey by the Brazilian central bank, bringing it to 4.45%. Another survey by Reuters showed a decline in the average inflation expectations for next year to 4.4% compared to 4.5% in the April survey.
These developments come at a time when monetary authorities in Brazil are striving to achieve a delicate balance between combating inflation and stimulating economic growth, which makes the decisions of the Brazilian central bank the focal point for both investors and economists alike.
