Brazil’s financial market lowers interest rate estimate for 2023 to 12%
Brazil’s financial market has revised its estimate for the basic interest rate, Selic, at the end of 2023, reducing it from 12.25% to 12% per year.
The estimate for 2024 remains unchanged at 9.5%. This update was published in the latest Focus Bulletin by the Central Bank (BC) on July 3, 2023.
The revision follows the announcement made by the Minister of Finance, Fernando Haddad, to the National Monetary Council (CNM) regarding the change in the inflation targeting regime.
The council decided to maintain the inflation target at 3% for 2024, 2025, and 2026. The implementation of the new system will begin in 2025.
In the most recent meeting of the Monetary Policy Committee (Copom) in late June, the Selic rate was kept at 13.75% per year for the seventh consecutive meeting.
However, the Central Bank has indicated that if the disinflationary trend continues in the coming months, the basic interest rate may be revised.
Additionally, economists have adjusted their forecast for inflation this year from 5.06% to 4.98%, marking the seventh consecutive decrease in this indicator.
The GDP growth projection for 2023 has been slightly increased from 2.18% to 2.19%.
The forecast for the exchange rate remains unchanged at R$ 5.10 for 2023, while for the following year, economists have reduced their projections from R$ 5.10 to R$ 5.108.
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This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief