The increase of 0.50 percentage point of the basic interest rate on Wednesday (7) was already expected by most of the financial market; The collegiate’s decision was unanimous
The Monetary Policy Committee () The rate increased by 0.50 percentage point on Wednesday (7), from 14.25% to 14.75% per year, as expected by most of the financial market. With the decision, the BC fulfills its wide -signed Guidance Forward in March that the interest would be raised to a lesser level than the 1 PP rhythm chosen by the collegiate at previous meetings. The decision was unanimous.
The interest curve priced with 80% chance a 0.5 percentage rise in Selic in the late afternoon of Wednesday. There was a 20% chance of a lower high, 0.25 point, embedded in prices. With this Wednesday’s decision, Copom has put interest rates at the highest nominal level since July 2006, in the first Lula administration, when Copom cut the rate from 15.25% to 14.75% AA.
At that time, interest was falling after they had reached 19.75% in May 2005, one of the largest levels of the 21st century. Since September, the BC has increased Selic in 4.25 points, the second largest rise in the last 20 years, losing only 11.75 points between March 2021 and August 2022, which occurred after the end of the pandemic.
*With information from Estadão Content
Posted by Carolina Ferreira
