Economy

Central Bank signals possible cut in interest after August

The nation’s benchmark rate stands at 13.75% a year since August 2022

Pedro Peduzzi

Published on 27/06/2023 - 12:10

Brasília

The minutes of the Monetary Policy Committee, released by the Central Bank on Tuesday (Jun. 27), report that the “predominant view” during the last meeting was one of greater confidence for a reduction in interest after August. The meeting was held on June 20 and 21.

The committee kept the Selic—the country’s benchmark interest rate—at 13.75 percent a year, thus “in line with the strategy of convergence of inflation around the target over the relevant horizon.” The rate has stood at this level since August 2022, the highest since January 2017.

According to the document, “the predominant view was that the continuation of the current disinflationary process, with the resulting impact on expectations, should enable us to build the necessary confidence to start a modest inflection process in the next meeting.”

The report also states that the committee was unanimous in pondering that the future moves in monetary policy will hinge on the progress of the inflation and the projections surrounding it.