Copom once again maintains the economy’s basic interest rate at 13.75% per year

Copom once again maintains the economy’s basic interest rate at 13.75% per year
Copom once again maintains the economy’s basic interest rate at 13.75% per year
The Monetary Policy Committee (Copom) maintained the Selic rate, the economy’s basic interest rate, at 13.75% per annum. The decision released after a meeting this Wednesday (3) was unanimous.

“The external environment remains adverse. Episodes involving banks abroad have heightened uncertainty, but with limited contagion on financial conditions so far, requiring continuous monitoring. In parallel, central banks in major economies remain determined to promote convergence of inflation rates towards its targets, in an environment in which inflation is proving to be resilient”, highlights the statement released by the Central Bank (BC).

The document also states that, in relation to the domestic scenario, “the set of the most recent indicators of economic activity continues to corroborate the scenario of deceleration expected by the Copom, although showing greater resilience in the labor market”.

“Consumer inflation, as well as its various underlying inflation measures, remain above the range compatible with meeting the inflation target. Inflation expectations for 2023 and 2024 calculated by the Focus survey rose marginally and are at around 6.1% and 4.2%, respectively”, adds the statement.

The rate remains at the highest level since January 2017, when it was also at 13.75% per annum. This was the sixth time in a row that the Central Bank did not change the rate, which has remained at this level since August last year. Previously, the Copom raised the Selic rate 12 times in a row, in a cycle that began amid rising food, energy and fuel prices.

Before the beginning of the upward cycle, the Selic had been reduced to 2% per year, at the lowest level of the historical series, which began in 1986. Due to the economic contraction generated by the covid-19 pandemic, the Central Bank had overthrown the tax to stimulate production and consumption. The rate was at the lowest level in history from August 2020 to March 2021.

Inflation

The Selic is the Central Bank’s main instrument for keeping official inflation under control, as measured by the Extended National Consumer Price Index (IPCA). According to the statement, the maintenance of the rate considered, among other factors, the persistence of global inflationary pressures, uncertainty about the final design of the fiscal framework to be analyzed by the National Congress and a more pronounced slowdown in global economic activity than projected.

“On the one hand, the increase in fuel prices and, mainly, the presentation of a fiscal framework proposal reduced part of the uncertainty arising from fiscal policy. On the other hand, the situation, characterized by a stage in which the disinflationary process tends to be more slow in an environment of unanchored inflation expectations, demands greater attention in the conduct of monetary policy”, says the statement.

infographic_selic

infographic_selic – ArteDJOR

Foto de © Marcello Casal JrAgência Brasil

Economia,Copom,Juros Básicos da Economia

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