Banker explaining interest rate to a client

Learn how Brazil's Central Bank uses the Selic rate to control inflation and affect your investments.

About this subject

The Selic rate is Brazil's benchmark interest rate, set by the Monetary Policy Committee (Copom) of the Central Bank. It influences all other interest rates in the country, from savings account yields to credit costs. When Copom raises the Selic, the goal is to curb inflation by making credit more expensive and discouraging consumption. Conversely, a low Selic stimulates the economy but may fuel inflation. For investors, the Selic is the benchmark for fixed-income investments such as Tesouro Selic, CDBs, and DI funds. Historically, the Selic has peaked above 14% per year during inflationary crises and hit record lows below 2% during the COVID-19 pandemic. Copom's decisions consider indicators like IPCA inflation, GDP, employment, and the global scenario. The Selic rate chart shows cycles of monetary tightening and easing, reflecting the government's priorities between inflation control and economic growth.

Frequently Asked Questions

What is the Selic rate and how does it work?

The Selic is Brazil's benchmark interest rate. It serves as a reference for all other rates and is used by the Central Bank to control inflation.

How does the Selic affect my investments?

Fixed-income investments like Tesouro Selic and CDBs are tied to the Selic. When the Selic rises, these investments yield more; when it falls, they yield less.

Who decides the Selic rate and how often?

The Selic is decided by Copom, which meets every 45 days. The decision is based on analyses of inflation, economic activity, and the global scenario.