Agents project a 1.75 percentage point increase in base interest over the next 6 months; information is from the Focus Bulletin
Financial market agents estimate the basic rate, the Selic, at 13.00% per year in May. To reach this level, the basic interest rate will have to increase by 1.75 percentage points over the next 6 months. The information is from the (Central Bank) Focus Bulletin. Here is the report (PDF – 769 kB).
The Selic rate is . Financial agents expect the Copom (Monetary Policy Committee) to readjust the base interest rate by 0.5 percentage points at the next meeting, to 11.75%. The collegiate one will be on December 10th and 11th, the last one in 2024.
According to projections by financial agents, the Selic will rise to 13% in May 2025. It will remain at this level until September of next year, when the Copom is expected to cut interest rates by 0.25 percentage points, to 12.75%. It should only return to the current level (11.25%) in the 1st half of 2026, according to estimates.
The higher Selic serves to control inflation and analysts’ future expectations. Financial agents’ projections for the IPCA (National Consumer Price Index) are for an accumulated rate of 4.63% in 2024 and 4.34% in 2025.
The inflation target is 3%. There is a tolerance range of 1.5 percentage points for more or less – making inflation of 1.5% to 4.5% permissible. The accumulated rate can only be outside this level, according to the new rules of the CMN (National Monetary Council).
Failure to meet this objective forces the Central Bank to publish an open letter to the Ministry of Finance with explanations. The monetary authority must inform, in the document, the time needed for inflation to return to the target.
GALIPOLO IN 2025
The president of the BC, Roberto Campos Neto, will leave office in 2024. The meeting on December 10 and 11 will be his last in command of the monetary authority. Appointed by the president (PT), the director of Monetary Policy, Gabriel Galípolo, will assume the role of president of the BC in January 2025.
Galípolo will have the mission of raising the base interest rate in the midst of those of the PT (Workers’ Party) and allies of the Lula government.
