THE SELIC RATE MAINTENANCE (Basic Economy Interest) At 15% per year received criticism from the productive sector. For industry, trade and union central entities, high will impair production and investment.
In a note, The president of the National Confederation of Industry (CNI), Ricardo Alban, classified the decision of the Monetary Policy Committee (COPOM) as “insufficient and wrong”. According to him, the high interest rates will suffocate the economy. According to him, measures such as the elevation of the financial operations tax (IOF) is equivalent to an increase in interest, and the United States tariff can result in less inflation in Brazil.
“We have already had the increase in IOF on credit and exchange operations and the increase in US fees about our exports. IOF rise on credit will increase by $ 4.9 billion the cost to industries, while US tariffs can cause industrial production to fall and the loss of thousands of jobs in the country. The moment calls for a more favorable monetary policy. CNI, Ricardo Alban.
For the Paulista Supermarket Association (APAS), international tensions make monetary policy more challenging. Even so, the entity considers the level of current interest high.
“Given this juncture, our concern is the maintenance of the interest rate on this level. Brazil has one of the highest real interest rates in the world. Selic rate maintenance at 15% at this conjuncture will impair investments, consumption of families; will increase the cost of credit and directly affect the level of economic activity of the country,” said Felipe Queiroz’s chief economist, in a statement.
The São Paulo Commercial Association (ACSP) reported that the Central Bank’s decision came in line with market expectations. Despite recognizing that interest rates are high, the entity estimates that inflation continues above the 4.5% target in 12 months.
“Despite the gradual slowdown of internal economic activity and the appreciation of the real, which tend to decrease pressure on prices, accumulated inflation remains far above the annual target, in a context of fiscal expansion, inflationary expectations, and greater external uncertainties, derived from the American trade policy, justifying a more cautious monetary policy,” explained the economist Ulysses Ruiz de Gamboa, Gamboa, from ACSP.
Union centrals
The BC’s decision was also poorly received by the trade union centrals. For the Single Workers Center (CUT), the BC hinders the lives of families with the new elevation of Selic And it maintains the scheme that transfers resources from consumers, companies and the state to the financial sector.
“The Central Bank says it has to maintain the interest rate high to control inflation. But Selic is not the only price control instrument and does not work for the types of inflation that Brazil faces. What the high Selic does is keep Brazil in the lead of the world’s highest interest, penalizing the population,” said the president of the National Confederation of Financial Workers (Contraf-Cut) and vice president) CUT, Juvandia Moreira.
In a note, Força Sindical, stressed that high interest rates favor only speculators and harm the worker. “We regret and consider it absurd to maintain the rate at such a high level. We understand that the Central Bank has missed a great opportunity to take advantage of the shrinking world demand to make a drastic reduction in interest rates, which could function as a stimulus for the creation of new jobs and to increase production in the country,” criticized the entity’s president Miguel Torres.
