RIO DE JANEIRO, Brazil, Aug 6, 2026 (BSS/AFP) - Brazil's central bank on Wednesday cut its benchmark interest rate for the fourth time straight, two months before presidential elections when incumbent Luiz Inacio Lula da Silva seeks another term.

The so-called Selic rate, one of the highest in the world, was lowered from 14.25 percent to 14 percent, the bank's Monetary Policy Committee, Copom, stated.

Markets had widely expected the cut, which is part of a cycle that began in March after almost two years of high interest rates.

Leftist Lula, who is seeking a non-consecutive fourth term in the upcoming elections, advocated for lower rates to stimulate South America's largest economy.

The central bank has exercised caution however, given the US-Israel war against Iran, which has pushed up oil prices and fueled inflation fears globally.

As for domestic affairs, the bank noted that despite easing inflation, it "still remains above the upper limit of the target."

The cost of living features among Brazilian voters' main concerns.

Year-on-year inflation slowed to 4.64 percent in June, driven by falling food and fuel prices.

Despite this slowdown, inflation remains above the official target range of 1.5 percent to 4.5 percent.