Brazil keeps world's highest real interest rate as central bank holds Selic at 13.75%

Brazil's central bank decided to hold the benchmark Selic rate at 13.75% per year, pausing its cycle of interest-rate cuts. With inflation expectations for the next 12 months factored in, Brazil's real interest rate stands at 9.49%, the highest among 40 economies analyzed.

The study was carried out by consultancies MoneYou and Lev Intelligence. Brazil remains ahead of countries traditionally known for high rates, including Turkey, Argentina, Russia, and Colombia.

“Discussions about fiscal adventures and scheduled interest-rate cuts create doubt over whether the central bank should or will cut rates, while the market practically decrees the end of the cycle, regardless of today's meeting.”

Turkey ranks second with a real rate of 7.77%, despite having the highest nominal rate in the survey at 36%. Argentina follows with 6.8%, Russia with 6.57%, and Colombia with 4.05%. Brazil also outpaces Indonesia at 3.67%, Mexico at 3.26%, South Africa at 2.93%, Hungary at 2.04%, and Chile at 1.69%.

In nominal terms, which do not discount inflation, Brazil ranks fourth behind Turkey at 36%, Argentina at 29%, and Russia at 14%. The decision comes amid financial market volatility, a weakening real against the dollar, and growing uncertainty over Brazil's fiscal policy path.

MoneYou chief economist Jason Vieira said the Iran-United States conflict altered global inflation projections, pushing monetary authorities worldwide toward more cautious stances. He added that debates over fiscal policy and post-election instability reinforced expectations that the Selic cutting cycle has ended.