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The Central Bank's Copom (Monetary Policy Committee) decided Wednesday (12) to maintain the basic interest rate (Selic) at 6.5% per annum. This is the sixth meeting where interest is held at this level. In March, there was a decrease from 6.75% to 6.5% per annum a rate that was maintained at meetings of May June As a result, Selic remains at his lowest level since the creation of the Copom in 1996 and the savings realized report less ( read lower ). The decision, which was unanimous, was the last under the government Michel Temer (MDB). The next meeting on the interests of the Central Bank is scheduled for 5 and 6 February, when Jair Bolsonaro (PSL) will badume the presidency of the Republic.
The increase in interest could take longer
In a statement issued after the decision, the central bank indicated that she saw a more comfortable situation for inflation which should advance the beginning of a high interest rate cycle.
British Columbia has improved its projection of the Extended Consumer Price Index (IPCA) in 2018, which currently stands at 3.7%, compared with 4.4%. For 2019 and 2020, the estimate was respectively 3.9% and 3.6%, compared with 4.2% and 3.7% previously.
"Copom sees a very calm scenario of inflation for the coming year, there is not much trouble to leave (the Selic in) 6.5% for an indefinite period and to follow market evolution, "said Luciano Sobral, an economist in Santander, who predicts a stable base interest rate for next year.
The rate fell from 14.25% to 6.5% a year
In October 2016, the Central Bank launched a series of 12 reductions in the Selic, which were halted in May this year. During this period, the interest rate went from 14.25% per year to 6.5% per annum.
Consumer interest rates are higher
Selic is the basic rate of the economy and serves as a benchmark for other interest rates. financing and remunerate the investments corrected by it. Selic does not exactly represent the interest rates charged by consumers, which are much higher.
According to the latest data published by by British Columbia the interest rate on the overdraft in October was 300.4% per annum. on average The interest on the credit card trick was on average 275.7% per year
Savings yields are lower
Since last September, savings have started to pay less because of the rule created in 2012 . When Selic is above 8.5% per annum, the savings return is 6.27% per annum (0.5% per month) plus the TR (reference rate).
However, when Selic is equal to or less than 8.5%, the savings will be 70% of the Selic plus TR. This, in practice, represents a lower yield.
Interest x Inflation
Interest is used by British Columbia as a tool to attempt to control inflation . In general, when inflation is high, British Columbia raises interest rates to reduce consumption and force prices down. When inflation is low, British Columbia reduces interest rates to stimulate consumption.
The objective is to keep inflation at 4.5% per year, with a margin of tolerance of 1.5 percentage points, that is to say, it can vary between 3% and 6%. According to the latest IBGE data the cumulative 12-month inflation rate was 4.05% in November, so within the limits of the government's target.
For the financial market, ] (19459004), which measures the official inflation, will close the year within the limits of the objective, to 3.71% .
(With National Agencies
