MNI BRIEF: BCB Copom Cut Selic Rate 25bp; Four Dovish Dissents
All deputy governors appointed by President Luís Inácio Lula da Silva voted for a 50 basis point cut.
The Central Bank of Brazil (BCB) reduced its official Selic rate by 25 basis points to 10.50% Wednesday in a split decision that saw four deputies dissent in favor of the 50 basis point cut indicated by the prior meeting's guidance.
"The Committee unanimously judges that the uncertain global scenario and the domestic scenario, marked by resilient economic activity and deanchored expectations, require greater caution," said the statement.
The reduction was broadly in line with market expectations for a slower pace of cuts. In March, the BCB's Monetary Policy Committee (Copom) reduced rates by 50 basis points and indicated it expected an additional cut of the same size at the next meeting. However, Campos Neto said last month it would be data-dependent after increasing global stress and the government’s revision to its 2025 fiscal target.
Deputy governors Gabriel Galípolo, Paulo Picchetti, Ailton de Aquino, and Rodrigo Alves Teixeira, all appointees of President Luís Inácio Lula da Silva, voted for a 50 basis point cut. (See MNI INTERVIEW: Brazil Could Hike Rates In 2025 - Ex-BCB Serra)