Brazil's central bank is maintaining its course on interest rate reductions, even as its own projections indicate inflation will remain above the official target in the coming years.
The stance was confirmed in the minutes from the latest Monetary Policy Committee (Copom) meeting, which also saw the benchmark Selic rate trimmed by 25 basis points to 14.25% annually.
The decision marks the third consecutive cut in the easing cycle.
According to the published minutes, committee members concluded that the current inflationary pressures are largely driven by supply-side shocks.
Under the central bank's preferred framework, these temporary disruptions should not dictate monetary policy, allowing the committee to continue lowering borrowing costs to support economic activity.
This approach highlights a growing divergence between headline inflation data and the central bank's underlying policy logic.