British Columbia keeps Selic at 15%, highest level since July 2006 | Finance

The collegial meeting takes place on the same day as the publication of the national consumer price index (IPCA) and the decision of the Federal Reserve (FED), the central bank of the United States.

The Brazilian Institute of Geography and Statistics (IBGE) highlighted an acceleration of the IPCA to 0.18% in November, after an increase of 0.09% in October. The result was below the median of 0.19% of projections collected by Value date.

Another point of attention for the committee concerns inflation expectations, which have cooled in recent months. The median of the projections collected in the Focus report was 4.40% for 2025 compared to 4.55% four weeks ago. For 2026, the median increased from 4.20% to 4.16%. As for 2027, the current relevant horizon for monetary policy, the period during which interest rate management has the greatest effect, it remained at 3.80%. The current target is 3%.

The Fed cut interest rates for the third time in 2025, as expected by the market. The Federal Open Market Committee (FOMC) of the Fed reduced it by 0.25 percentage points (pp) to between 3.50 and 3.75% per year. The decision was not unanimous, with two directors voting to maintain and one for a 0.50 pp reduction.

View British Columbia’s full statement:

“The external environment still remains uncertain due to the economic situation and policies of the United States, with implications for global financial conditions. This scenario requires caution on the part of emerging countries in an environment marked by geopolitical tensions.

Compared to the national scenario, all indicators continue to show, as expected, a trend of moderation in the growth of economic activity, as observed in the latest GDP publication, while the labor market shows resilience. In the most recent releases, headline inflation and underlying measures continued to show some slowing, but remained above the inflation target.

Inflation expectations for 2025 and 2026 calculated by the Focus survey remain above the target, standing at 4.4% and 4.2% respectively. Copom’s inflation projection for the second quarter of 2027, the current relevant horizon for monetary policy, stands at 3.2% in the reference scenario (Table 1).

Risks to inflation, both upside and downside, remain higher than usual. Among the upward risks weighing on the inflationary scenario and inflation expectations, we distinguish: (i) an unanchoring of inflation expectations over a longer period; (ii) greater resilience of services inflation than expected due to a more positive output gap; and (iii) a combination of external and internal economic policies which have a greater inflationary impact than expected, for example through a constantly more depreciated exchange rate. Among the downside risks, we distinguish: (i) a possible slowdown in domestic economic activity more pronounced than expected, having impacts on the inflation scenario; (ii) a more pronounced global slowdown resulting from the trade shock and a scenario of greater uncertainty; and (iii) a drop in commodity prices with disinflationary effects.

The Committee continues to monitor announcements regarding the imposition of tariffs by the United States on Brazil and the impact of domestic fiscal policy developments on monetary policy and financial assets, thereby reinforcing caution in a scenario of greater uncertainty. The scenario continues to be marked by unanchored expectations, high inflation projections, resilient economic activity and labor market tensions. To ensure inflation converges towards the target in an environment of unanchored expectations, monetary policy at a level of significant contraction for a very long period is necessary.

Copom has decided to maintain the base interest rate at 15.00% per year, and considers that this decision is compatible with the strategy of convergence of inflation around the objective over the horizon considered. Without prejudice to its fundamental objective of ensuring price stability, this decision also involves smoothing fluctuations in the level of economic activity and promoting full employment.

The current scenario, marked by high uncertainty, calls for caution in the conduct of monetary policy. The Committee believes that the current strategy of maintaining the current level of interest rates for a very long period of time is adequate to ensure inflation converges towards the target. The Committee emphasizes that it will remain vigilant, that future monetary policy measures may be adjusted and that, as usual, it will not hesitate to resume the adjustment cycle if it deems it appropriate.

The following members of the Committee voted for this decision: Gabriel Muricca Galípolo (president), Ailton de Aquino Santos, Diogo Abry Guillen, Gilneu Francisco Astolfi Vivan, Izabela Moreira Correa, Nilton José Schneider David, Paulo Picchetti, Renato Dias de Brito Gomes and Rodrigo Alves Teixeira.