RIO DE JANEIRO, BRAZIL – The Monetary Policy Committee (COPOM) decided on Wednesday to cut the SELIC by 0.5 percentage point for the fourth consecutive time, bringing interest rates down to 4.5 percent, the lowest basic interest rate in history.
In recent days, the general opinion was that even with signs of recovery in the economy and high inflation because of the price of meat, the Central Bank would not change the strategy of further reducing interest rates, but there was still no consensus on the next steps.
In a statement, the Central Bank pointed out that it sees the Brazilian economy gaining ground and that “the recovery will continue at a gradual pace”. “Data on economic activity from the second quarter suggest that the recovery process of the Brazilian economy gained momentum, compared to what was observed until the first quarter of 2019,” says the text.
For the external scenario, the monetary authority sees a “relatively favorable environment for emerging economies,” produced by the “provision of monetary incentives in the main economies, in a context of economic slowdown and below-target inflation”.
In addition, the Committee believes that several measures of underlying inflation “are at comfortable levels”.
Source: Infomoney