Copom raises Selic to 13.75% per 12 months

Copom raises Selic to 13.75% per 12 months

BC decided to maintain the interest rate hike cycle, which began in March 2021

O Monetary Policy Committee (Copom) of Central Bank (BC) announced this Wednesday, 3rd, an increase of 0.5 percentage point in the basic interest rate, the Selicfrom 13.25% to 13.75% per year.

The increase was expected by the market. The Copom had signaled, in a statement published after the June meeting, the possibility of a new adjustment, “of equal or lesser magnitude” than the one approved that month, also of 0.5%.

With the decision, Copom maintains the cycle of interest rate hikes, which began in March 2021, in the face of still worrying inflation. The increase announced on Wednesday was the 12th in a row.

According to the latest Focus Bulletin, released by the BC on Monday, the 1st, the interest rate should end the year at 13.75%. Some analysts, however, already understand that there will be another high in September.

The BC spent six years without raising the Selic rate. Between July 2015 and October 2016, the rate was 14.25% per year and then started to be reduced to 6.5% per year in March 2018. As of August 2019, it began another phase of reductions, reaching 2% per year in August 2020, with the impact of the covid-19 pandemic.

In March 2021, for the first time since July 2015, the BC raised the basic interest rate by 0.75 percentage point, to 2.75%, and started the upward cycle.

The war in Ukraine should continue to impact prices in Brazil, especially for oil, wheat and fertilizers, items that tend to be more expensive during the conflict. The inflation observed in the United States also contributes to the volatility in the dollar exchange rate.

The forecast of the last Focus Bulletin is that the National Consumer Price Index (IPCA) closes 2022 at 7.15%, a lower estimate than the one recorded in the previous week, of 7.30%. Last month, the market came to project 9%.

Despite the drop, the market predicts that the target ceiling will be exceeded for the second year in a row. The inflation target to be pursued by the BC in 2022 is 3.5%, with a tolerance range of 1.5 percentage points up or down, between 2% and 5%.

The IPCA accumulates an increase of 5.49% in the year and 11.89% in the last 12 months. In June, the increase was 0.67%, according to the Brazilian Institute of Geography and Statistics (IBGE).

Source: Exam

Related post

Fintech waste assortment within the periphery raises R$ 10 million with a fund from the Solví Group

Fintech waste assortment within the periphery raises R$ 10…

The startup must expand the business model and enter other areas. It is in negotiations with city halls with city halls,…
The 12 months Elon Musk noticed his fortune shrink by $132 billion

The 12 months Elon Musk noticed his fortune shrink…

Amid the widespread fall in company stocks in the United States, most billionaires watched their fortunes shrink in 2022. But the…
Focus Bulletin: Selic on the finish of 2023 goes from 11.75% to 12.00% per 12 months

Focus Bulletin: Selic on the finish of 2023 goes…

Currently, the focus of monetary policy is on the years 2023 and 2024. But the BC has emphasized the horizon of…

Leave a Reply

Your email address will not be published. Required fields are marked *