06/27/2024 – 12:39
The Central Bank repeated in the Quarterly Inflation Report (RTI) released this Thursday, 27th, a study on various estimates for Brazil’s neutral real interest rate, published for the first time in the June 2023 document. Considering the median of methodologies used, the rate would be 5% now, from 4.8% in the last release of the box.
The BC’s official estimate for neutral real interest – raised from 4.5% to 4.75% in the latest minutes of the Monetary Policy Committee (Copom) – is lower than these calculations suggest. Even in the second quarter of 2023, when the median was 4.8%, the BC chose to maintain its number at 4.5%.
“As it is an unobservable variable subject to high uncertainty in its measurement, it is recommended to use several methodologies. Considering this set of measures, the Copom decided to increase the neutral real interest rate used in the projections from 4.5% to 4.75% per year over the considered horizon”, says the RTI.
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