The decision of the Central Bank (BC) to maintain the Selic rate (basic interest rate) at 13.75% per year was criticized by entities in the productive sector. They believe that the measure will keep credit expensive and delay the recovery of the economy.
The National Confederation of Industry (CNI) classified the decision as “wrong”. For the entity, the current scenario of the economy indicated that the Copom should to have started reducing the Selic rate at this meeting.
“The CNI hopes that this Selic reduction process will start at the next meeting. The confederation believes that maintaining the interest rate is, at this moment, unnecessary to combat inflation and only brings additional costs to economic activity”, highlighted the statement. The entity mentioned that real interest rates (after discounting inflation) are at 7.7% per year, 3.7 percentage points above the economy’s neutral interest rate.
In a note, the Federation of Industries of Rio and Janeiro (Firjan) reiterates that maintaining the high level of the economy’s interest rate (Selic), at 13.75% per year, has imposed severe sacrifices on economic activity and represented an obstacle to credit conditions, harming business investments and household consumption. The federation reinforces that, for the reduction of the Selic rate to occur in a responsible manner, it is necessary that the uncertainties in the context of public accounts be overcome.
“Firjan points out that, with the intensification of global uncertainties, it becomes urgent to adopt a strong coordination of fiscal and monetary policies. There’s no more room for shortcuts. The implementation of a new fiscal framework and the approval of structural reforms will contribute to gains in competitiveness and to the adoption of necessary measures for economic and social development”.
The trade union centrals, which protested in recent days against high interest rates, also criticized the Central Bank’s decision. The Central Única dos Trabalhadores (CUT) repudiated the decision. For the entity, the maintenance of interest rates “reveals a complete submission by Copom to the interests of rentiers and an evident boycott by the president of the BC to the efforts of all and all who work for the resumption of economic growth”.
Força Sindical issued a note in which it classifies current interest rates as “extortionate”, suffocating production, consumption and job creation. “Once again the Copom [Comitê de Política Monetária] of the Central Bank frustrates the workers, and bows to the speculators. Tragically, in our country we are also hostages of the very powerful interests of the rentiers. Maintaining the rate at 13.75% per year is a real prize for speculators and an extortion for Brazilians and the productive sector”, highlighted Força Sindical in the text.