The Brazilian real appreciated to 5.11 per USD, recovering from the three-week low of 5.145 touched on August 4th, after the Copom signaled a cautious stance on further monetary easing. The BCB cut the Selic rate by a widely anticipated 25 basis points to 14.0%, its lowest level since March 2025.
Policymakers emphasized, however, that both the pace and the magnitude of additional cuts will depend on incoming economic data and the inflation outlook. The committee also cited increased global uncertainty arising from conflicts in the Middle East and ambiguity surrounding monetary policy in advanced economies, underscoring the need for caution among emerging markets.
The move followed the Federal Reserve’s decision a week earlier to keep its benchmark rate unchanged at 3.50%–3.75%, maintaining a wide interest rate differential that continues to lend support to the real.
