The first session of Conjuncture Analysis of the Copom meeting begins

This month’s Central Bank Monetary Policy Committee (Copom) began at 10:15 am, with the first session of analysis of the conjuncture.

In the last meeting, in September, the collegiate maintained the Selic rate at 13.75% per year, declaring the end of the longest cycle of interest rate hikes in its history.

For this meeting, the projection of stability of the basic interest rates of the economy at 13.75% among the 59 participants of the survey carried out by Projections Broadcast is unanimous.

In the September Copom, the BC indicated the maintenance of the Selic rate for a “long enough period” to reach the convergence of inflation to the target, but warned that, if disinflation does not occur as expected, interest rates may rise again.

Afterwards, Copom members signaled that the BC was comfortable with the scenario that Focus shows for the Selic.

“Using the Focus curve with a cut in June, we show that we are achieving our goals,” said BC President Roberto Campos Neto, at the press conference on the Quarterly Inflation Report (RTI), referring to the convergence to the target in 2024 .

Campos Neto avoided, however, saying how “sufficiently prolonged” the maintenance of the Selic at high levels must be in order to reach the inflation targets.

In this week’s Copom, the years 2023 and 2024 should have the same weight for the collegiate. Until September, 2024 had a lower degree, but the BC emphasized the 12-month horizon until the first quarter of the year in question.

Currently, the projections of the Market Focus Report for the IPCA – official inflation index – are 5.60% in 2022 and 4.94% in 2023, both above the target ceiling of 5% and 4.75%, in that order.

For 2024, it is at 3.50%, surpassing the central target (3%), but below the ceiling of 4.50%.

Basic interest is currently at the same level as the rate that was in effect from December 2016 to January 2017.

The bullish cycle that ended in September saw 12 consecutive increases from an all-time low of 2%, reached amid the drastic effects of the Covid-19 pandemic.

Copom’s analysis of the conjuncture extends to today’s afternoon and also into tomorrow’s morning.

Then, in the afternoon, the president of BC, Roberto Campos Neto, and the eight directors of the institution have another round of discussions before announcing the decision on the Selic.