The Focus bulletin suggests an increase of 0.25 percentage points –
The Central Bank’s (BC) Monetary Policy Committee (Copom) meets this Wednesday, the 17th, to decide whether to maintain or raise the Selic interest rate, with possible divisions among its members.
The recent rise in the dollar and the impact of drought on energy and food prices have raised uncertainty about the possibility of an interest rate hike, the first in more than two years.
At the last meeting, Copom warned of the need for caution due to the economic scenario. The Focus bulletin suggested an increase of 0.25 percentage points, by the end of 2024 at 11.25% per year. The last increase took place in August 2022, after which Selic was lowered to 10.5%.
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Copom said the rate hike was due to the appreciation of the dollar and increased public spending, given that inflation, according to the latest bulletin, rose from 4.22% to 4.35% in 2024, approaching the upper limit of the target. In August, the IPCA showed slight deflation, but the trend was for energy and food prices to rise due to seasonal factors.
Selic is crucial to controlling inflation and influencing other interest rates in the economy. The inflation target for 2024 is 3% with a tolerance interval of 1.5 percentage points. The next inflation report is due in late September, reflecting recent economic changes.
