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BC lower Selic to 2% per year and the country has a negative interest rate of 0.71%
- A financial investment that yields 100% of the current Selic rate over the next 12 months will have resulted below the inflation expected by the financial market for the same period.
By: SiiLA News
08/06/2020 The Central Bank's Copom (Monetary Policy Committee) decided to cut the basic interest rate by 0.25 percentage points, to 2% per year, on Wednesday (5). With this, Brazil consolidates itself among the countries with the highest negative real interest rate.
A financial investment that yields 100% of the current Selic rate over the next 12 months will have resulted below the inflation expected by the financial market for the same period.
The market predicts, according to this week's Central Bank Focus report, an inflation rate of 1.63% by the end of 2020, below the target of 4% with a tolerance range of 1.5 points up or down set by the National Monetary Council (CMN).
The Central Bank indicated that the Selic interest rate should remain at the same level in the upcoming meetings but left room for adjustments, suggesting that there could be further cuts to an even lower level.
Read the full story (in Portuguese).
Source: Folha de S. Paulo
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