After reducing the Selic rate twice in the last two months, the Monetary Policy Committee (Copom) of the Central Bank (BC) reinforced, in the minutes of its last meeting, that it was not possible to meet the federal government’s expectation of further accelerating the reduction of the Brazilian basic interest rate. Under the allegation that inflation in the country is still high, the Copom has indicated that it will maintain more cautious cuts, of 0.5 percentage points, to ensure that the resumption of economic activity does not end up raising prices.
The minutes of the meeting were released by the BC this Tuesday (26). The body’s last meeting took place between Tuesday and Wednesday last week.
In it, the Copom reduced the Selic from 13.25% per year to 12.75% per year. The 0.5 point cut was the second in a row announced by the agency. In August, he decided to reduce the Selic for the first time in three years.
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The rate is a kind of reference for the national economy. Its reduction tends to make loans and financing cheaper, stimulating the growth of the Gross Domestic Product (GDP), the generation of jobs and income.
“Regarding the next steps, the Committee members unanimously agreed with the expectation of cuts of 0.50 percentage points in the next meetings and assessed that this is the appropriate pace to maintain the contractionary monetary policy necessary for the disinflationary process”, informs the minutes of the last meeting of the body.
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Rising inflation
Also this Tuesday, the Brazilian Institute of Geography and Statistics (IBGE) released the Broad Consumer Price Index-15 (IPCA-15) for the month of September. The IPCA-15 is considered a preview of official inflation.
This month, it was 0.35% – 0.07 percentage points above that recorded in August (0.28%). In the year, the IPCA-15 accumulates an increase of 3.74% and, in 12 months, of 5.00% – that is, above the 4.24% in the previous 12 months.
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In September 2022, the rate was negative 0.37%.
Transport products and services were those that had the greatest impact on September’s previous inflation. Gasoline, for example, rose 5.18% from mid-August to mid-September. It alone was responsible for 0.25 points of the 0.35% recorded in September.
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On the other hand, food and beverage items fell 0.77%. The price of food at home fell 1.25%; of potatoes, 10.51%; of onion, 9.51%; of carioca beans, 8.13%; of long-life milk, 3.45%; of meat, 2.73%; and chicken pieces, 1.99%.
To calculate the IPCA-15, prices were collected from August 15th to September 14th and compared with those in force from July 14th to August 14th. The indicator refers to families with an income of 1 to 40 minimum wages and covers the metropolitan regions of Rio de Janeiro, Porto Alegre, Belo Horizonte, Recife, São Paulo, Belém, Fortaleza, Salvador and Curitiba, in addition to Brasília and the municipality of Goiânia.
Editing: Rodrigo Chagas
