Brazil central bank raises rates by 25 bps in seventh straight hike
The bank's rate-setting committee, Copom, unanimously decided to lift the benchmark Selic rate to 15%, the highest since July 2006. A majority of 27 out of 39 economists polled by Reuters had expected the bank to hold rates steady at 14.75%.
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Reuters
3 days ago
- Reuters
Brazil inflation hits 5.3%, central bank set to hold rates next week
SAO PAULO, July 25 (Reuters) - Brazil's inflation remained well above the central bank's target range in its mid-July reading, official data showed on Friday, as policymakers gather next week for a meeting at which they are widely expected to hold interest rates at a two-decade high. Inflation in Latin America's largest economy hit 5.30% in the 12 months through mid-July, statistics agency IBGE said, up from 5.27% a month earlier and slightly above the 5.26% expected by economists in a Reuters poll. Brazil's central bank targets inflation at 3%, plus or minus 1.5 percentage points, and policymakers have pledged to bring it back to that level. The bank delivered 450 basis points in interest rate hikes between September and June, taking the benchmark Selic rate to 15%, the highest since July 2006. It signaled last month a "very prolonged" pause to assess the effects of the hikes. "The mid-month inflation figures give policymakers no reason to consider raising rates again," said Capital Economics' emerging markets economist Kimberley Sperrfechter, who expects conditions to allow for rate cuts around the turn of the year. The central bank's rate-setting committee, known as Copom, is scheduled to meet on July 29 and 30. In the month to mid-July alone, consumer prices as measured by the IPCA-15 index rose 0.33%, up from 0.26% in the previous month. The index had been expected to rise 0.30%, according to the median forecast in a Reuters poll. The monthly increase was driven by higher housing costs as electricity prices climbed, IBGE said, as well as higher transport prices, with airfares jumping. Closely watched food and beverage prices, however, dropped for the second straight month. "Today's result will not influence Copom's decision," Inter senior economist Andre Valerio said. "It should keep interest rates unchanged, reaffirm its commitment to meeting the inflation target, and offer no indication of when it might begin a rate-cutting cycle."
Reuters
3 days ago
- Reuters
Brazil's tax revenue surges to record in H1
BRASILIA, July 24 (Reuters) - Brazil's federal tax revenue hit a record high in the first half of the year, lifted by strong June collections, revenue service data showed on Thursday, as President Luiz Inacio Lula da Silva seeks to boost public income to shore up fiscal accounts. Federal tax revenue rose 6.62% in June from a year earlier in real terms, reaching 234.594 billion reais ($42.51 billion). From January to June, revenue totaled 1.426 trillion reais, up 4.38% in real terms from the same period last year. Both the monthly and year-to-date figures were the highest ever recorded for their respective periods, the tax authority said. Revenue from the IOF tax on financial operations increased in June after the government raised the levy on several transactions via decree in late May. Although Congress later overturned the measure, it was reinstated earlier this month following a Supreme Court decision. The revenue service also highlighted a rise in income tax collection on financial investments, driven by the elevated benchmark interest rate, Selic, "which contributed to the performance of fixed income funds and securities." Policymakers have raised the Selic by 450 basis points since last September to fight inflation, taking the rate to a nearly 20-year high of 15%. Despite strong tax revenue, the government projected earlier this month a primary deficit of 26.3 billion reais for the year, excluding nearly 50 billion reais in court-ordered payments that the Supreme Court ruled should not count toward the fiscal target. While the figure remains within the zero-deficit goal's tolerance band of 0.25% of GDP, it underscores the challenge of balancing the budget amid rising mandatory spending, including pensions and social benefits. ($1 = 5.5187 reais)
Reuters
08-07-2025
- Reuters
Brazil aims to triple trade flows with India, Lula says
BRASILIA, July 8 (Reuters) - Brazilian President Luiz Inacio Lula da Silva said on Tuesday his country aims to triple trade flows with India from $12 billion last year "in the short term," without giving a more specific time frame. Speaking alongside Indian Prime Minister Narendra Modi after a state visit in Brasilia, Lula also said Brazilian planemaker Embraer ( opens new tab wants to strengthen its presence in India, partnering with companies there. Lula also said that expanding a preferential trade agreement between India and South American bloc Mercosur could help reduce both tariff and non-tariff barriers that are limiting trade.
