Brazil’s Central Bank maintains Selic rate for 7th consecutive meeting
The Central Bank’s Copom (Monetary Policy Committee) has decided to keep the basic interest rate, known as the Selic, unchanged at 13.75% for the 7th consecutive meeting.
This decision aligns with market expectations, which anticipate a potential rate reduction in the next meeting on August 2.
The unanimous decision was announced by the Central Bank on Wednesday (June 21, 2023).
Despite criticism from President Luiz Inácio Lula da Silva and his allies, the monetary authority has remained steadfast in its approach.
Roberto Campos Neto, the President of the Central Bank, has faced the most criticism from those close to President Lula.
He has emphasized the importance of maintaining technical integrity in the bank’s communiqués and has expressed his desire for the Central Bank to be recognized for its independent decisions.
The Selic rate has remained at 13.75% annually since August 2022, for over 10 months.
This rate is designed to control the country’s official inflation, measured by the IPCA (National Wide Consumer Price Index).
Brazil’s annual inflation has been on a downward trajectory, with the rate reaching 3.94% for the 12-month period until May, as reported by the Brazilian Institute of Geography and Statistics (IBGE).
The IPCA has experienced 11 consecutive months of deceleration.
Financial market analysts predict a potential increase in inflation in the second half of the year, projecting a rate of 5.12% for 2023.
This level exceeds the target set by the National Monetary Council (CMN) of 3.25%.
The Central Bank missed its inflation targets for both 2021 and 2022, leading to the publication of a public letter in January to provide explanations.
The inflation trajectory over the past two years shows a deviation from the intended targets: 10.06% in 2021 (target: 3.75%) and an estimated 5.12% in 2022 (target: 3.5%).
In response to criticism from President Lula’s allies, Campos Neto has emphasized the autonomy of the monetary authority from the Executive Branch.
He asserts that there is independence among the 8 directors and the president, with his vote being one among the 9 at the Central Bank.
The latest Copom meeting on June 21, 2023, was the final one under former President Jair Bolsonaro.
The upcoming meeting on August 1st and 2nd will see Gabriel Galípolo, former executive secretary of the Finance Ministry, and Ailton Aquino, chief auditor of the Central Bank, assuming the positions of Monetary Policy and Surveillance directors, respectively.
These nominations, made by President Lula, are subject to approval by the Senate’s Economic Affairs Committee (CAE) on June 27, after which they can officially assume their roles.
More: Brazil news in English, every day from The Rio Times.
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Brazil — Live Market Board
+1.34%
208,991.95
+1.34%
64,986.91
+0.52%
11,073.17
+0.44%
2,825,172
-0.26%
2,536.78
+0.43%
59,610.00
+2.19%
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 208,991.95 | +1.34% | +21.85% | 206,220.24 | 168,310 | 167,142 | — |
| USD/BRL | 5.16 | +0.01% | -5.13% | 5.16 | 5.18 | 5.14 | — |
| SELIC | 14.00% | — | — | — | — | — | |
| PETR4 | 41.64 | -0.05% | +35.19% | 41.66 | 41.97 | 41.15 | 41,499,400 |
| VALE3 | 72.97 | +0.83% | +30.75% | 72.37 | 73.54 | 72.66 | 17,658,000 |
| ITUB4 | 38.60 | -1.03% | +4.57% | 39.00 | 39.34 | 38.39 | 29,487,800 |
| BBDC4 | 16.85 | +0.36% | +3.50% | 16.79 | 16.90 | 16.67 | 19,416,900 |
| BBAS3 | 19.37 | +0.47% | +0.73% | 19.28 | 19.44 | 19.16 | 11,069,200 |
| B3SA3 | 14.26 | -0.21% | +12.73% | 14.29 | 14.47 | 14.11 | 33,037,800 |
| ABEV3 | 14.89 | -0.80% | +21.91% | 15.01 | 15.07 | 14.81 | 16,453,100 |
| WEGE3 | 47.59 | +0.49% | +29.99% | 47.36 | 48.08 | 47.36 | 3,364,600 |
| PRIO3 | 59.14 | -0.19% | +50.67% | 59.25 | 59.81 | 58.74 | 3,325,600 |
| SUZB3 | 41.33 | +2.35% | -23.55% | 40.38 | 41.48 | 40.35 | 3,914,900 |
| RENT3 | 34.68 | -0.09% | +0.84% | 34.71 | 34.96 | 34.35 | 7,979,100 |
| AZZA3 | 15.89 | -2.63% | -53.76% | 16.32 | 16.42 | 15.82 | 1,330,300 |
| CSNA3 | 4.30 | +0.47% | -42.65% | 4.28 | 4.41 | 4.26 | 10,076,100 |
| GGBR4 | 24.69 | +2.19% | +51.38% | 24.16 | 24.85 | 24.18 | 7,047,600 |
| ENEV3 | 24.21 | -1.38% | +70.49% | 24.55 | 24.64 | 23.99 | 9,297,000 |
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