The Monetary Policy Committee (Copom) of the Central Bank have unanimously decided on Wednesday (Sep. 2) to keep the benchmark interest rate, known as Selic, at 14.25% per year. The Central Bank confirmed market forecasts by suspending tightening monetary policy, after a cycle of seven increases. At the last meeting, Copom raised the Selic rate by 0.5 percentage points, taking it back to the level of October 2006.

The Monetary Policy Committee had already announced in a note that the benchmark interest rate would not change from now on. "The committee understands that keeping this level of benchmark interest rate, for a period long enough, is a necessary [measure] for the inflation convergence to its target at the end of 2016". The inflation target established by the National Monetary Council (CMN) stands at 4.5%.

There is a tolerance range around plus or minus 2 percentage points, within a maximum 6.5%. For 2015, the economic team estimates that inflation gauged by the National Consumer Price Index (IPCA) would close out 2015 above the maximum at 9.25%. Until July, according to the Brazilian Institute of Geography and Statistics (IBGE), the year-to-date IPCA reaches 9.56% for 12-month period.