Going against global monetary authorities, the Bank of Brazil (BC) chose not to increase its interest percentages. In an announcement made this Wednesday, 21, the Monetary Policy Committee (Copom) maintained the Selic Rate at 13,75% per year, interrupting the high cycle of recent times.
Selic is considered the mother rate of the Brazilian economy and, that's why, controls inflation rates and directly impacts investments. For this reason, after the position of the BC, the Brazilian stock exchange Ibovespa showed increases benefiting from this change.
The maintenance of the basic interest rate was approved by the presidency and board of directors of Banco do Brasil. The vote included 7 votes in favor of maintaining the rate in 13,75% and had just 2 votes against this measure. Like this, among voters, two directors voted to increase the fee again in 0,25 percentage point.
The end of a cycle
The decision to maintain the rate in 13,75% did not come as a surprise and was already expected among financial and economic analysts. Nonetheless, This drop in inflation represents the end of a cycle of increases that has already lasted a year and a half. In all, they were 12 consecutive discharges.
Between March and June 2021, Banco do Brasil increased the Selic by 0,75 percentage point for each new decision. Then, from August, the increase rose to 1% by meeting, arriving in 1,5% in October of 2021 and remaining that way until February this year.
Em 2022, two more interest rate hikes 1 point were recorded, followed by two 0,5 points. Now, even with Selic maintained, This remains the highest rate recorded since January 2017. The committee's consecutive increases began in response to recurring increases in inputs and basic costs, like gasoline, food and energy.
Economy will remain monitored
Even with the decision, the Copom does not rule out a possible increase in the Selic Rate soon. The committee committed to monitoring the economy and making the necessary adjustments if inflation does not fall as expected.. In note, Copom spoke out:
“The committee reinforces that it will persevere until not only the disinflation process is consolidated but also the anchoring of expectations around its goals. The committee emphasizes that future monetary policy steps may be adjusted and does not hesitate to resume the adjustment cycle if the disinflation process does not proceed as expected.”.
