The uncertainties of the external economic scenario and indicators that show moderation in internal growth are among the factors that have caused The Monetary Policy Committee (Copom) decided last week to maintain the basic interest rate of the Economy (Selic) at 15%. The evaluation was released on Tuesday (23) in the minutes of the last Copom meeting, which took place on September 16 and 17 ,.
After a “firm interest rate”, the committee chose to “interrupt the cycle and evaluate the accumulated impacts”. The intention is, according to the minutes, to maintain the current interest rate “for a very prolonged period” to ensure that the inflation target is reached.
“The current scenario, marked by high uncertainty, requires caution in conducting monetary policy. The committee will follow vigilant, assessing whether the maintenance of the current level of interest rates for a long time is sufficient to ensure the convergence of inflation to the goal. The committee emphasizes that the future steps of monetary policy may be adjusted and that it will not hesitate the adjustment cycle if it deems appropriate,” he says, “he says. the document.
Internal and external scenarios
In the minutes, the Committee cites the economic conjuncture of the United States and the tariffs imposed by the country as external factors that have had “greater impact” than structurally challenging topicswhich, in turn, have had a less impact on the formation of market prices than expected.
“Thus, the debate on the beginning of the cutting cycle by the Federal Reserve [Banco Central dos Estados Unidos] and the rhythm of American growth, while persistent doubts about the impact of tariffs on US inflation. In any case, long -term risks, which even contribute to making the scenario uncertain, such as the introduction of tariffs and the elevation of tax spending, remains present, ”says the minutes.
In the internal scenario, Copom evaluates that “the conjuncture of domestic economic activity continues to indicate some moderation in growth”. The committee also says that tax or credit stimuli have not yet had relevant impacts to change this scenario. “Monthly sectoral research and more timely consumer data corroborate, generally, the continuation of a gradual reduction of growth,” says the document.
Inflation goal
In relation to inflation, The committee points out that expectations, measured by different instruments and obtained from different groups of agents, “remain above the inflation target in all horizons, maintaining the scenario of inflation adverse”.
Given this scenario, Copom chose to keep the Selic rate at 15%. “After a firm interest rate, the committee has chosen to interrupt the cycle and evaluate the accumulated impacts. Now, as the scenario has been outlined as expected, the committee begins a new stage where it chooses to maintain the rate unchanged and continues to evaluate if the current level is maintained for a long time, such a strategy will be sufficient for the convergence of inflation to the goal,” says the last meeting.
Projections
Selic is the main instrument of the Central Bank to reach the inflation target. When the copom increases the basic interest rate, the purpose is to contain the impulse that heated demand causes in price increases. The highest interest rates make credit more expensive and stimulate savings, braking economic activity.
When the Selic rate is reduced, credit is tendency to be cheaper, with incentive to production and consumption, reducing control over inflation and stimulating economic activity.
Banks consider other factors other than Selic when defining interest to be charged to consumers, including risk of default, profit and administrative expenses.
With the decision, Copom predicts that the variation of inflation, measured by the National Consumer Price Index (IPCA), close 2025 by 4.8%, still above the margin of tolerance. The goal set by the National Monetary Council (CNM) is 3%, with tolerance interval of 1.5 percentage points and plus 1.5 percentage point, that is, from 1.5%to 4.5%.
The projection for 2026 is a 3.6% IPCA variation, which should fall to 3.4% in the first trimester of 2027, indices closer to the center of the goal.
