The Monetary Policy Committee (Copom) of the Central Bank (BC) decided, this Wednesday (26) to maintain the basic interest rate, the Selic, at 13.75% per year.
The current level is the highest since November 2016, when the base rate was 14% per year.
This is the second time in a row that the Committee has kept the rate unchanged, after a sequence of 12 hikes, which began in March 2021, when the Selic was at 2% per year. The last meeting in which the rate was changed, on August 3, there was a rise of 0.5 percentage point.
In the first decision to maintain the rate, on September 21, the Copom statement pointed out that, despite the maintenance, a new high was not ruled out if “the disinflation process does not proceed as expected.”
The basic interest rate is a mechanism used by central banks to control inflation, a scenario that has affected different economies around the world. In Brazil, although the IPCA (Consumer Price Index – Broad), which measures the country’s official inflation, points to a deceleration in price increases, the index is still far from the center of the target defined by the Central Bank, of 3, 5%, with a tolerance range of 1.5 percentage points (pp) up or down.
This Wednesday’s Copom decision is in line with market expectations, which assess that interest rates are already at a high enough level now and that inflation has started to show the first signs of cooling, according to consulted banks and brokerages. fur CNN Brasil Business .
This does not mean, however, that Brazil will soon again see a scenario of controlled prices and low interest rates. In the view of analysts, relief from inflation will be slow, and interest rates should only drop again in mid-2023.
According to the Boletim Focus, a weekly report by the Central Bank, the general market expectation is for a Selic at the same 13.75% by the end of 2022 and at 11.25% – still a double-digit rate – at the end of 2022. 2023. The numbers consider the median of the projections of more than 100 banks and analysis houses consulted by the BC.
*With information from Juliana Elias, from CNN Brasil Business
Source: CNN Brasil
Joe Jameson, a technology journalist with over 2 years of experience, writes for top online news websites. Specializing in the field of technology, Joe provides insights into the latest advancements in the industry. Currently, he contributes to covering the world stock market.
