RIO DE JANEIRO, BRAZIL – After Brazil’s Central Bank’s (BC) Monetary Policy Committee (COPOM) raised the SELIC rate from 4.25% to 5.25% per year last week and signaled new hikes down the road, the financial market raised its projections for interest rates at the end of this and next year, according to the BC’s Focus report published Monday, August 9.
According to economists consulted by the monetary authority, interest rates should close 2021 at 7.25% per year, and remain at this level until December 2022. In the last survey, SELIC estimates stood at 7.00% by the end of 2021 and 2022.
In the statement following the last meeting, the monetary authority pointed out that despite the recent improvement in public debt sustainability indicators, high fiscal risk continues to raise the risk balance, i.e., with inflation trajectories above projections for the monetary policy-relevant horizon.
Expectations as compiled by the Focus survey for COPOM’s upcoming September meeting are for a new increase of one percentage point in the SELIC rate to 6.25% per year.