In minutes, Copom indicates that Selic should remain high for a 'very long period'

The Monetary Policy Committee (Copom) is unlikely to lower the country's base interest rate – the Selic – any time soon. This is what the minutes of the Central Bank (BC) board meeting, released on Tuesday 24, show.

The document refers to last week's meeting, which raised the Selic rate to 15% per year . The increase marks the seventh consecutive adjustment in the cycle that began in September, reaching the highest level since July 2006.

Under the management of Gabriel Galípolo , four increases were made, accumulating an increase of 4.5 percentage points in the period.

Copom says that it “opted for an increase of 0.25 percentage points, assessing that the economy still shows resilience, which makes it difficult for inflation to converge to the target and requires greater monetary tightening”.

This upward trajectory, however, should be interrupted. In the statement, the board indicated that it “ anticipates an interruption in the interest rate hike cycle to assess the accumulated impacts yet to be observed from monetary policy .”

The BC wants to observe whether the effects of the restrictive policy adopted so far will be able to reduce prices and bring inflation closer to the 3% target for the year.

In other words, the strategy involves keeping the rate at 15% for a “very prolonged period” — an expression that appeared five times in the document.

“The Committee emphasizes that it will remain vigilant, that future monetary policy steps may be adjusted, and that it will not hesitate to continue the adjustment cycle if it deems it appropriate,” the body said.

The monetary authority expects the effects of monetary tightening to deepen in the coming quarters, resulting in lower economic activity and a possible cooling of the labor market.

Read the full Copom minutes :

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