The Monetary Policy Committee (Copom) of the Central Bank (BC) holds the sixth meeting of the year, this Tuesday (20) and Wednesday (21), to define the destination of the Selic rate, the basic interest of the Brazilian economy. The agency is divided between maintaining the rate at 13.75% per year or raising it to 14% per year.
The most recent expectations of financial institutions will be released tomorrow (19), when the BC will publish the new edition of the Focus bulletin. In last week’s survey, market analysts believed in the maintenance of the rate until the end of the year. However, the rise in interest rates from central banks in the United States and Europe may force the BC to make a new increase.
In a statement after the last meeting, at the beginning of August, the Copom informed that the risks of inflation being above expectations in longer terms made the BC choose not to end the Selic high cycle, at the time. The text, however, informed that the Copom should reduce the pace of increases, raising the rate by 0.25 point.
Since then, the record of two consecutive deflations, in July and In August, raised expectations that the BC will end the bullish cycle. The fall in energy and fuel prices caused official inflation to remain below 10% in the 12 months ending in August. The Selic is the BC’s main instrument to control inflation.
