Haddad says that increased Selic is part of the “Guidance” of the 2024 Copom
BRASILIA (Reuters)-The increase in the Selic rate at 1 percentage point, to 14.25% per year, by the Monetary Policy Committee (Copom) on Wednesday is part of the “Guidance” (projection) of the central bank of last year, said Finance Minister Fernando Haddad.
The BC decided to follow the pace already foreseen of interest at interest, in a unanimous decision of its board, and indicated a less magnitude adjustment at the next meeting if confirmed the expected scenario.
In a statement, the Committee emphasized that in addition to the May meeting, the total magnitude of the tightening cycle “will be dictated by the firm compromise of convergence of inflation to the goal” and will depend on the evolution of front prices, including components more sensitive to economic activity, projections and expectations of inflation, economy idle level and risks to front prices.
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With this Wednesday’s decision, the basic interest rates go to the highest level in more than eight years. Selic was last 14.25% in 2016, when it remained at this level until October amid an economic crisis and the impeachment process of then -President Dilma Rousseff.
According to the document, the forecast of a lower increase in Selic in May occurs “given the continuity of the adverse scenario for the convergence of inflation, the high uncertainty, and the lags inherent to the ongoing monetary tightening cycle”.
