# Brazil central bank raises rates by 25 bp, first hike in two years

> Brazil's central bank raised its benchmark Selic rate by 25 basis points, its first increase in two years. The bank cited resilient economic activity, labor market pressures, a positive output gap, higher inflation projections and unanchored expectations as reasons for tighter policy.

- Date: 2024-09-18 · published 2024-09-18T12:00:00.000Z
- Category: macro · region Brazil · magnitude medium
- Page: https://feedsoft.ai/events/12467-brazil-central-bank-raises-rates-by-25-bp-first-hike-in-two-years
- Commodities: [Brazilian Real (BRL per USD)](https://feedsoft.ai/c/USDBRL.md)

## Why it matters

Higher Brazilian interest rates attract foreign capital and tend to strengthen the real, which can lower the dollar cost of Brazilian soy and corn exports and firm domestic feed input costs. The move signals tighter credit conditions for Brazilian livestock and feed demand.

## Read by commodity

- USDBRL: bearish ▼

## Linked price moves

| Commodity | Date | Window | Change % | z-score | Why linked |
| --- | --- | --- | --- | --- | --- |
| USDBRL | 2024-09-19 | 5 | -4.3% | -2.9 | Brazil's central bank raised Selic by 25 bp, its first hike in two years, widening the rate differential versus the US and supporting BRL appreciation (lower BRL per USD). |

## Similar past events

| Commodity | Date | Event | 5-day % | 20-day % |
| --- | --- | --- | --- | --- |
| USDBRL | 2025-01-30 | [Brazil central bank hikes rates by 100 bps, confirms same in March](https://feedsoft.ai/events/26712-brazil-central-bank-hikes-rates-by-100-bps-confirms-same-in-march.md) | -1.4% | -0.9% |
| USDBRL | 2021-10-19 | [Brazil central bank intervenes in FX market rattled by new spending \| Financial Post](https://feedsoft.ai/events/44783-brazil-central-bank-intervenes-in-fx-market-rattled-by-new-spending-financial.md) | +1.4% | -0.4% |
| USDBRL | 2021-10-13 | [Brazil central bank sells $1 bln in surprise FX swap auction](https://feedsoft.ai/events/44784-brazil-central-bank-sells-1-bln-in-surprise-fx-swap-auction.md) | +0.4% | -0.5% |
| USDBRL | 2022-02-22 | [Brazil central bank chief says higher interest rates, positive fiscal are supporting FX \| Financial Newsletter](https://feedsoft.ai/events/42914-brazil-central-bank-chief-says-higher-interest-rates-positive-fiscal-are.md) | +0.7% | -3.4% |
| USDBRL | 2022-05-03 | [Barclays Sees Sharp Rally in Brazil’s Real on Rate Hikes](https://feedsoft.ai/events/41607-barclays-sees-sharp-rally-in-brazil-s-real-on-rate-hikes.md) | +1.9% | -6.0% |

## Sources

- reuters.com: https://www.reuters.com/markets/rates-bonds/brazil-central-bank-raises-rates-by-25-bp-first-hike-two-years-2024-09-18/

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Data from Feedsoft AI (https://feedsoft.ai/). For information only; not investment advice.