Copom cuts Selic to 13.75%, but Brazil still has the highest real interest rate in the world
The basic interest rate is used in negotiations of public bonds issued by the National Treasury, serving as a reference for other rates in the economy
TL;DR
- Copom reduced the Selic rate by 0.25 percentage points to 13.75% annually, the fifth consecutive cut.
- Brazil has the highest real interest rate in the world (8.45%), based on market rates and projected inflation.
- The committee noted a gradual moderation in economic activity but a resilient performance and a heated labor market.
- External uncertainties related to Middle East conflicts and advanced economies' monetary policy were highlighted.
- The Central Bank's decision aims for inflation convergence towards the target, but the committee emphasizes the need for serenity and caution due to increased uncertainty and risks.
- Two director positions at the Central Bank remain vacant, with nominations expected after the elections.
- The next Copom meetings are scheduled for November 3-4 and December 8-9.