Copom April Preview: What to Expect from the Rate Decision

The Monetary Policy Committee (Copom) meeting on April 28–29, 2026 is one of the most anticipated events on Brazil's economic calendar for the second quarter. With the Selic rate currently at 14.75% per year — following a 0.25 percentage point cut at the March meeting — the market is divided on the size of the next move.

The decision matters for virtually all Brazilian financial assets: fixed income, stocks, the exchange rate, and real estate funds will all be directly impacted by the Central Bank's signaling.

What the Last Meeting Left Behind

At the March 18, 2026 meeting, the Copom cut the Selic from 15.00% to 14.75% — a reduction of 0.25 percentage points, in line with what most of the market expected. The statement was considered cautious, with directors signaling that the pace of cuts would depend on the evolution of inflation data and volatility in the external scenario.

Central Bank directors themselves acknowledged that caution has "paid dividends" — a reference to the fact that tighter monetary policy has helped anchor inflation expectations and contributed to the real's appreciation.

Where Inflation Stands

The IPCA accumulated over 12 months stands at 4.71% — above the inflation target ceiling of 4.5% for 2026. This figure is one of the main arguments against a more aggressive 0.50pp cut at the April meeting.

The IPCA breakdown shows pressure coming primarily from services (persistent) and some home food items. The industrial component, meanwhile, has shown some relief from currency appreciation — a stronger real makes imports cheaper and reduces cost pressure on industry.

What the Market Is Pricing

The Central Bank's Focus report, which consolidates market analyst expectations, points to a Selic of 12.50% at year-end 2026. To reach that level from the current 14.75%, the BC would need to cut a total of 2.25 percentage points across the remaining meetings.

The current market debate divides into two camps:

Camp A: 0.50pp cut in April The argument is that with the real appreciated, imported inflation is easing, economic activity is not showing signs of excessive overheating, and the interest rate differential with the US (Selic 14.75% vs Fed Funds ~5.5%) remains high enough to keep carry trade attractive. A larger cut now would avoid the need to maintain high rates for longer.

Camp B: 0.25pp cut in April The argument is that IPCA above the target ceiling does not allow accelerating the pace. Brent oil price volatility — which still oscillates near $97/barrel after touching $112 in March — creates uncertainty about the fuel and energy component of inflation. A cautious BC would prefer to maintain the gradual pace.

The median of market expectations shifted, over the course of March, from 0.50pp to 0.25pp, suggesting most analysts believe the BC will be more cautious in April.

The Role of Brent Volatility

One factor that particularly complicates the April decision is oil price volatility. Brent moved from a peak of $112/barrel in March to around $97 in mid-April — a significant decline driven by ceasefire expectations in the Middle East.

This is, in theory, positive for Brazilian inflation: cheaper oil tends to reduce fuel prices, which has a direct disinflationary effect (gasoline and diesel directly affect the IPCA) and an indirect one (reduction in transportation and logistics costs).

But the BC cannot assume the oil decline is permanent. If peace talks fail, the barrel price could return to higher levels quickly. Working with such a volatile commodity demands humility in projections.

Impact on Investments

What to Watch Before the Meeting

In the days leading up to April 28, the relevant data to monitor includes:

• April IPCA-15: the monthly inflation preview — a below-expectations reading could reopen room for 0.50pp
• Economic activity data (IBC-Br): the BC's monthly indicator that serves as a GDP proxy
• BC director statements: any explicit signaling before the blackout period
• Brent crude: continuation or reversal of the decline is a key factor

The April 29 meeting will release the decision at the end of the day — and the minutes, with the detailed justification, will be published the following week.

At Royal Binary, founded by Sidnei Oliveira, monitoring the interest rate cycle is part of the team's daily analysis — across more than 340 monthly operations, with strategies adapted to the rate environment. Discover the platform.