07:54 AM EDT, 07/31/2025 (MT Newswires) -- Brazil's central bank (BCB) Copom kept the policy rate unchanged at 15.0% on Wednesday and retained hawkish bias in its statement, said Societe Generale.

BCB pointed to the weakening growth and uncertainty caused by global factors, including the threat of United States tariffs, wrote the bank in a note to clients. Nevertheless, the weak fiscal backdrop and improving, but still de-anchored inflation expectations are likely to keep it on hold in the coming meetings.

SocGen continues to expect the first rate cut in Q1 2026.

The rate decision coincided with U.S. President Donald Trump signing an executive order delaying 50% of tariffs -- 10% previously announced and an additional 40% announced on Wednesday -- on Brazilian exports to the U.S. by one week, now set to be implemented from Aug. 6.

The order also removed a number of items -- including orange juice, iron ore, oil products, machinery, and civil aircraft/parts-from the tariff list. The market viewed this as a positive development, signaling the possibility of further dilution of the tariffs, stated the bank. Attention now turns to how the Brazilian government will respond.

The BCB statement acknowledged the tariff announcements and assessed that the global environment has become "more adverse and uncertain due to the economic policy and economic outlook in the United States, mainly regarding its trade and fiscal policies and their effects."