Economists expect a rise of 0.5 point in the Selic, which can go to 13.25% this Wednesday

The Monetary Policy Committee (Copom) defines this Wednesday (15) where the Selic, the basic rate of the economy, which currently stands at 12.75% per year, will go. The expectation of the market, and of economists heard by CNN, the collegiate must announce a new increase of 0.50 percentage point, as it had already signaled in the last meeting, in May. With this, the rate should go to 13.25% per year.

The purpose of the increase in the Selic rate is to contain inflation and inflationary expectations. The chief economist at Kínitro Capital, Sávio Barbosa, explains that, if expectations regarding prices are high, the pass-through ends up being higher, and in order to break this upward dynamic it is necessary to contain the acceleration of inflation.

“The market will follow very closely what the signal for the August meeting will be. If the Selic rate remains at this level for an extended period, I believe that the Copom can end the cycle of interest rate hikes at the June meeting, cutting interest rates only in mid-2023, which is compatible with the convergence of inflation”, he observes. .

Barbosa points out that the interest rate in the United States should also rise by 0.5 point this Wednesday (15), as the projections show. But, according to him, there is a possibility that the American rate will increase by 0.75 point and, if that happens, the next meeting of the Brazilian Central Bank may bring a new adjustment.

“Last week, the US inflation data for May was released, which was above expectations. This increase in interest rates in the United States has made the pressure of the Brazilian currency grow, and may cause the dollar to strengthen. Because of this, this Wednesday’s decision will be very important and, if it reaches 75 basis points, the risk of a new increase by the Brazilian central bank in August could increase”, he says.

The economist and professor at Ibmec Thiago Moreira agrees with the expectation of a rise to 13.25% in the Brazilian interest rate and 0.5 point in the American one. He points out, however, that the means by which the inflationary fight is carried out are not very efficient in the current scenario. For him, the current model puts pressure on the Central Bank to have to make increases because, if it doesn’t, expectations are unanchored.

“The answer is always raising interest rates. When we look at the Brazilian reality, this form of combating inflation has not been very successful. The Central Bank was one of the first to aggressively raise interest rates and inflation only went up. It is a cycle that ends up being very negative for the economy,” he analyzes.

Moreira reports that the increase in fuel prices and the war in Ukraine help to increase inflation and end up putting pressure on interest rates. According to him, these factors not only do not attack the root of the problem, but also attract negative side effects to the economy.

“This can discourage productive investment, encourage rentism, which are people who live only on financial investments, reduce the appetite for productive investment, in addition to generating employment. In addition, it makes Brazilian families even more indebted with the increase in default, with the commitment of income that is already difficult for families to be able to make the financial payment”, he adds.