Haddad: Copom increase of 1 point was a surprise, but there was pricing in this sense

The Minister of Finance, Fernando Haddad, stated this Wednesday that the Monetary Policy Committee’s decision to raise the Selic rate by 1.00 percentage points, to 12.25% per year, surprised him, in a way, but admitted that there was pricing in the markets.

“It was (a surprise) on the one hand, but there was pricing in that sense”, Haddad said, in an interview with journalists outside the Treasury shortly after the Copom announcement, but did not speak about the content of the statement, stating that he does not comment on the decision before seeing the minutes of the meeting.

Asked whether the spending containment package announced last month and the negative reactions of the financial markets, which pointed to it as insufficient to correct public accounts, weighed on the negative side of the Copom’s balance of risks, the minister simply stated that “from the point of view From a fiscal point of view, we are pursuing the goals established a year ago.”

In the decision statement this Wednesday, the Copom cited the risk of worsening inflationary dynamics following the announcement of the government’s fiscal measures.

“The perception of economic agents regarding the recent fiscal announcement significantly affected asset prices and agents’ expectations, especially the risk premium, inflation expectations and the exchange rate. It was assessed that such impacts contribute to more adverse inflationary dynamics,” the BC said in the statement.

The disappointment of financial markets with the contents of the package, which had been eagerly awaited since before the municipal elections in October, put pressure on Brazilian assets and caused the dollar to set a series of records and the Ibovespa to record falls.