The Monetary Policy Committee (Copom) of the Banco Central (BC) decided, this Wednesday, the 1st, to maintain the Selic, the basic interest rate, at 13.75% per annum. This was the first Copom meeting in 2023.
For the BC, the maintenance of the Selic value comes in the wake of inflationary pressures arising from the slowdown in growth in the internal and external environment. The Committee also believes that the uncertainty surrounding its assumptions and projections is currently greater than usual.
To define the level of interest, the Central Bank uses the inflation target system. When inflation is high, the Central Bank raises the Selic rate. When inflation estimates are in line with targets, the Central Bank can reduce the economy’s basic interest rate.
US interest rate
The Federal Reserve (Fed, US central bank) raised, this Wednesday, its basic interest rates by 0.25 percentage point, reaching the range of 4.75%. This is the eighth consecutive increase. According to the Fed’s advice, the forecast is for new highs in the future. The “anticipation” of future increases serves as a tool for maintaining inflation at 2% per year.
Jerome Powell, chairman of the Fed, has ruled out a possible rate cut this year.