Copom starts fifth meeting of 2026 to set the Selic

On August 4, 2026, the Central Bank's Monetary Policy Committee began its fifth meeting of the year. The decision on the benchmark interest rate, the Selic, is to be announced on August 5, after two days of debates on the national and international economic scenario. The meeting occurs with the Selic at 14.25% per year, its lowest level in 2026.

Start of Copom's fifth meeting

Copom meets every 45 days. On the first day of the session, technical analyses on the evolution of the Brazilian and global economies, as well as the behavior of the financial market, are presented. On the second day, committee members assess the scenarios and set the level of the benchmark interest rate.

Expectations for the Selic rate decision

Expectations point to the decision being announced on August 5. On Monday (3), the Focus Bulletin showed that the market lowered the Selic projection from 14% to 13.75% for 2026, the first downward revision since March. In previous meetings, Copom had signaled the possibility of cuts, but the conflict between the United States and Iran created uncertainties, especially in fuel prices, leading the committee to adopt a more cautious stance.

Reduction in inflation forecasts in the Focus Bulletin

According to the latest Focus Bulletin, the projection for the Broad Consumer Price Index (IPCA) was reduced from 5.12% to 5.03% for 2026. Despite the improvement, the estimate is still above the inflation target ceiling, which is 3% with a tolerance interval of 1.5 percentage points up or down, i.e., an upper limit of 4.5%.

How the Selic rate influences credit and consumption

The benchmark interest rate serves as a reference for the other rates in the economy and for the negotiation of public securities issued by the National Treasury. When Copom raises the Selic, the goal is to curb heated demand; higher interest rates make credit more expensive, stimulate savings, and reduce price pressures. On the other hand, higher rates can hinder economic expansion. When the Selic is lowered, credit tends to become cheaper, favoring consumption and investment, which stimulates economic activity.

Cautious scenario amid international conflicts

Although in previous meetings Copom had considered the possibility of rate cuts, the United States–Iran conflict created uncertainties, mainly in fuel prices. This situation led the committee to adopt greater caution in its decisions, keeping the rate at 14.25% per year after three consecutive reductions of 0.25 percentage points in the March, April and June meetings.

With information from Agência Brasil.