Brazil's high inflation forces central bank to keep Selic up, pushing credit costs above 400%

Brazil's central bank is maintaining a restrictive Selic rate as inflation remains above its 3% target. The IPCA index hit 4.72% over the past 12 months, surpassing the 4.5% upper limit, and expectations for 2026‑2027 stay above the goal. The bank warns that persistent price pressures, especially in services, could keep the policy rate high to curb demand.

Consequently, credit costs have surged. Rotating credit‑card rates now exceed 400% annually, straining small and medium‑sized enterprises that rely on short‑term financing. Lawyers highlight risks of abusive charges and advise firms to review contracts, restructure debt, and improve financial planning to mitigate cash‑flow pressures caused by the elevated cost of capital.