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Anticipating Economic Boost: Brazil Government Foresees Minimum 50 bps Rate Reduction, Reveals Minister

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Brazilian Government Expects Further Interest Rate Cuts

Planning Minister Simone Tebet shares insights

Brazilian real notes


The Brazilian government expects cuts of at least 50 basis points in the central bank’s benchmark interest rate over the remaining three meetings this year, aiming to end 2023 with the rate below 12%, Planning Minister Simone Tebet said on Tuesday.

Current Interest Rate

  • The current benchmark interest rate, known as the Selic rate, stands at 13.25%.
  • Last month, the central bank started an easing cycle with a half-percentage-point reduction, ending nearly a year of holding rates steady to combat high inflation.
  • The next monetary policy decision is scheduled for September 20.

Support for Central Bank Autonomy

During an interview with TV GloboNews, Tebet voiced support for the formal autonomy of the central bank. She expressed concern about the delay in the commencement of the easing process.

Rate Cut Pace

Policymakers have consistently stressed that the central bank will keep the 50 basis point rate cut pace, with any changes contingent on significant shifts in the inflation outlook.

Eliminating the Primary Budget Deficit

Tebet expressed confidence in the process of eliminating the primary budget deficit in 2024. She emphasized that Finance Minister Fernando Haddad has additional revenues that were not yet factored into the calculations.

Balancing Public Accounts

Tebet stated that from next year onwards, the spending control treadmill will move at the same speed as the revenue increase treadmill to help balance public accounts.


According to Planning Minister Simone Tebet, the Brazilian government expects further interest rate cuts to end 2023 with the rate below 12%. The central bank will continue with a 50 basis point rate cut pace, and the process of eliminating the primary budget deficit is on track.


Reporting by Marcela Ayres; editing by Jonathan Oatis and Leslie Adler

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