On March 16th, the Monetary Policy Committee (Copom) of the Central Bank increased the Selic rate – basic interest rate – from 10.75% to 11.75%. Evidently, this attitude will interfere in the Brazilian's life, but now understand why.
Due to the war between Russia and Ukraine, inflation in Brazil has been increasing. Well, as both countries are oil and grain exporters, derivatives soon became more expensive.
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With that, unfortunately, the increase made by Copom was already predicted by economists. According to the Extended National Consumer Price Index (IPCA), in the month of February alone, official inflation already registered an increase of 1.01%. This being the level of highest increase since 2015.
According to analysts, the Selic will continue to expand in the coming months. There are speculations that in the month of May, it may have an increase of 12.5%. In June, 12.75% — and maintained until the end of this year.
How will the loans
This Selic rate is a major influencer for interest rates, such as loan interest. In other words, when the Copom raises the Selic, loans become more expensive. However, by increasing this modality, spending is heading towards a decrease, soon the economy cools down and prices are controlled.
References from the Central Bank inform that, in the month of January, the average price reached 35.3%. In the previous month (February), the average was 33.8%.
If we look at January 2021, the bank rate was 28.4%. That is, within the period of one year, there was an increase of almost 7%. The data refer to the free resources segment — in which financial institutions freely define the financing values.
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