By increasing the pace of the Selic high cycle, the Central Bank’s Monetary Policy Committee (Copom) also warned that it intends to keep its foot on the accelerator. The collegiate raised this Wednesday, 4, the basic interest rate by 1.00 percentage point, from 4.25% to 5.25% per year, and has already signaled a new increase of the same magnitude at the next meeting. With that, the Selic can reach 6.25% already in September.
“Right now, the Copom’s baseline scenario and the balance of risks indicate that a cycle of raising the interest rate to a level above neutral is appropriate,” said the Copom.
Despite this indication of maintaining the new pace of rate increase by 1 pp – after three increases of 0.75 pp – the Copom emphasized that the future steps of monetary policy may be adjusted to ensure compliance with the inflation target. Once again, the board stated that the next decisions will depend on the evolution of economic activity, the balance of risks and inflation projections and expectations for the relevant horizon of monetary policy.
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