Austin Rating’s Alex Agostini showed the rate has risen 13.7 percentage points since 2021
Real interest –which is adjusted for inflation– should be 7.4% in the next 12 months. The projection is from the chief economist of Austin Rating, Alex Agostini. From February 2021 to September 2022, the rate rose by 13.7 percentage points.
The percentage is high because inflation is falling, and the BC (Central Bank) signaled that it will maintain the basic rate, the Selic, at 13.75% per year for an extended period.
The survey was based on the projection “ex-ante”, that is, when annualized interest is calculated based on projections for the next 12 months. Real interest rates were negative for 20 months, according to the estimate, from March 2020 to October 2021. It reached its lowest level in February 2021, when it was -6.3%.
When considering the calculation “ex post”, when estimates for the 12 months prior to the reference month are taken into account, Brazil’s real interest rate was 3.3%, according to the estimate. In the period, inflation was higher and the Selic rate was on an upward trend.
In this calculation, real interest was negative from October 2020 to July 2022, or 22 months.
The lowest peak was in September 2021, when it was -6.6%. It rose 9.9 percentage points to its current September level of 3.3%.
The BC (Central Bank) decided on Wednesday (21.Sep.2022) to keep the basic interest rate, the Selic, stable at 13.75% per year. Said he’ll stay at this level for “sufficiently prolonged period”.
The decision was not unanimous, with 7 directors opting for the maintenance of the rate and 2 for the increase of 0.25 percentage point. Selic had risen for 12 consecutive meetings. Here’s the intact of the press release (55.5 KB).
The committee is made up of the directors of the BC. They meet every 45 days to set interest. The next meeting will be on the 25th and 26th of October.
The Selic is the main instrument to control inflation, which is high in the country and in the world. Despite this, the IPCA (National Consumer Price Index) decelerated in the last 2 years due to the reduction in fuel taxes.
The rate dropped to 8.73% in the 12-month period through August. It was 10.07% in July.
Even with the loss of breath, inflation is 5.23 percentage points above the inflation target of 3.5%.
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