A transition from easing to prolonged high interest rates
The CDI (Interbank Deposit Rate) represents the average rate of unsecured overnight interbank lending and serves as the primary benchmark for short-term interest rates in Brazil. Closely aligned with the policy rate, it reflects prevailing monetary conditions and directly influences the cost of credit, asset pricing, and financial intermediation across the economy.
Recent dynamics
The series shows a clear easing cycle throughout the second half of 2023 and into mid-2024, with the CDI declining from levels above 13% to around 10.4% by mid-2024. This downward adjustment was gradual and limited in magnitude.
From mid-2024 onwards, the rate remained broadly stable for several months before entering a renewed tightening cycle toward late 2024. Through 2025, the CDI increased steadily, reaching levels close to 15% and remaining persistently elevated into early 2026, indicating a prolonged period of high interest rates.
Interpretation and economic signal
The most relevant feature of the series is not only the level of interest rates but their persistence at elevated levels over an extended period. Even during the easing phase, rates remained high in absolute terms, and the subsequent tightening cycle reinforced a prolonged environment of restrictive financial conditions.
Sustained high interest rates over long periods increase the cost of capital, compress credit demand, and raise the hurdle rate for investment decisions.
From a structural perspective, extended periods of elevated rates tend to influence the composition of economic activity, favoring short-duration financial positions over long-term productive investment. As financing costs remain high for prolonged periods, capital allocation becomes more selective, with investment projects requiring higher expected returns to remain viable.
This dynamic can contribute to a slower pace of capital formation and reinforce a pattern of subdued expansion in sectors more dependent on long-term financing.
Conclusion
The recent trajectory of the CDI highlights not only a transition from easing to tightening but, more importantly, the persistence of high interest rates over an extended horizon. The maintenance of elevated levels through 2025 and into 2026 suggests a structurally restrictive financial environment.