2027: Brazil’s Selic Pause Set to Continue – Societe Generale

Selic remains at 13.75%. According to Societe Generale, the Banco Central do Brasil (BCB) has paused its five-meeting easing cycle amid post-election volatility and fiscal uncertainty. Economist Dev Ashish now forecasts no change in the policy rate through 2Q27. Cuts are expected to resume only after inflation expectations stabilise and fiscal visibility improves, implying around 100 bps of easing and a year-end 2027 Selic rate of 12.75%.

13.75% Selic Held to Restore Credibility

"Elsewhere, the BCB left the Selic rate unchanged at 13.75% yesterday, bringing its five-meeting easing cycle to a halt in response to post-election market volatility and fiscal uncertainty."

"Policymakers acknowledged the more challenging inflation outlook but stopped short of validating market expectations for renewed tightening, opting instead to preserve flexibility."

"Despite weakening growth and still-restrictive real rates, the message was clear: restoring policy credibility takes priority."

"Our economist Dev Ashish now expects Selic rate to remain unchanged through 2Q27, with easing resuming only after inflation expectations stabilise and fiscal visibility improves, leaving scope for around 100bp of cuts in 2027 and an end-2027 Selic rate of 12.75%."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Learn more.)