The Monetary Policy Committee (Copom) raised the Selic rate to 13.25% per year. This is the result of the impacts of the war in Ukraine and the global economy. It is the highest interest rate since January 2017. As a result, Brazil continues to have the highest real interest rate in the world.
Read more: How much is it worth investing R$ 1,000 in savings, treasury and funds with Selic at 13.25%?
According to financial experts, the increase in the Selic rate from 12.75% to 13.25% was already expected. The forecast is that new increases will be announced soon by Copom. This was the fourth meeting of the Central Bank committee this year.
With the anticipation of a new readjustment at the next meetings, the increase may once again be 0.5. In a statement, Copom believes that the next change should be of equal or lesser magnitude.
The Copom also highlighted that other risk factors are global inflationary pressures and “the uncertainty about the future of the country’s fiscal framework and fiscal policies that imply support of aggregate demand, partially incorporated into inflation expectations and asset prices”.
It is already the 11th readjustment in the Selic rate.
In addition to the war in Ukraine, the rise is a result of the rise in inflation and tensions in the financial market. Raising the Selic rate is a way of trying to control inflation. Higher interest rates make credit more expensive and tend to discourage production and consumption.
The problem is that this also makes it difficult to recovery of the economy.
With this increase by the Central Bank, Brazil consolidates its leadership and is the country with the highest real interest rate in the world, at 8.10% per year. Data is from Infinity Asset Management.
The survey considers the real interest rates of 40 countries. According to the survey, Brazil is ahead of Mexico, Colombia, Chile and Indonesia. The United States ranks 25th with negative annual real interest rates of 3.07% per year.