Brazil Cuts Selic Rate to 14.75% Amid Global Uncertainties

Brazil's central bank lowered its benchmark Selic interest rate by 0.25 percentage points to 14.75 percent on Wednesday, marking the first reduction in nearly two years and initiating a cautious easing cycle amid heightened global uncertainties.

The Monetary Policy Committee, known as Copom, voted unanimously to trim the rate from 15 percent, where it had remained for nine consecutive meetings since June 2025, the highest level since 2006. The decision came after policymakers signaled in January that cuts could begin this month, but the smaller-than-expected move reflected caution triggered by escalating geopolitical tensions in the Middle East. A U.S.-Israeli military campaign against Iran has driven Brent crude oil prices above 100 dollars a barrel, up roughly 60 dollars from levels assumed at the central bank's prior meeting. Iran's Revolutionary Guard has threatened to close the Strait of Hormuz, a vital chokepoint for 20 percent of global oil supplies, intensifying concerns over commodity prices and inflation.

In its statement, Copom noted that the external environment has grown more uncertain due to the intensification of these conflicts, with repercussions for global...