LatinNews Daily - 17 September 2026

*The monetary policy committee (Copom) of Brazil’s central bank (BCB) has lowered the country’s benchmark interest rate (Selic) from 14.0% to 13.75%. This marks the fifth consecutive rate cut of 25 basis points and comes the same day as the BCB released the latest figures for its IBC-Br economic activity index, which showed a second straight month of decline, in what is the latest sign that Brazil’s economy is cooling, amid high borrowing costs. The Copom statement listed both upside and downside risks to inflation but with an upward “asymmetry”, projecting annual inflation to reach 5.2% by year end. As of August, Brazil’s annual inflation stood at 4.22%. Upside inflationary risks include supply shocks in oil and its derivatives, climate effects on the agricultural sector, persistent services inflation, and stimuli to aggregate demand, inter alia. The statement did not indicate whether the next Copom meeting in November would see another rate cut, but private sector economists surveyed by the BCB are currently projecting the Selic rate will remain at 13.75% for the rest of 2026. Meanwhile the latest IBC-Br economic activity released yesterday showed a monthly decrease of 0.2% in July, following a 0.6% decrease in June. Brazil’s economic activity in July, which fell more than the 0.1% contraction forecast by a Reuters poll of economists, was dragged down mainly by a 1.2% monthly drop in agriculture, while the industrial sector’s activity declined by 0.4% and services posted zero monthly variation.

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