After five consecutive cuts, the Central Bank maintains interest rates at 13.75% per year

After five consecutive cuts, the Central Bank's Monetary Policy Committee maintained, this Wednesday (4), the basic interest rate, the Selic, at 13.75% per year.

It was the first decision on interest rates after President Lula's re-election. With the directors of the Central Bank meeting, the financial market had a positive day with the victory of the Democrats in the United States, which led American stock markets to rise. After six consecutive falls, the Ibovespa closed up 1.2% and the dollar fell. But, in less than two weeks, the American currency went from R$4.99 to R$5.45. And inflation expectations worsened.

The basic interest rate, a reference for new investments, loans and businesses, came from a sequence of five cuts. The downward cycle was interrupted with the Selic at 13.75% per year. In the assessment of economist Felipe Salto, chief economist at Warren Investimentos, there was no room for a new cut in the Selic:

"It is necessary to remember that the government has the power to change this trend in interest rates if it decides to make a major change in fiscal policy. If the government manages to contain the growth rate of public expenditure and reduce waivers, tax benefits, frills, all sorts of benefits that exist in the Budget today, this would greatly help the Central Bank, in the medium term, to be able to converge towards a balance with lower interest rates".

After five consecutive cuts, the Central Bank maintains interest rates at 13.75% per year — Photo: Jornal Nacional/ Reproduction

The statement from the Central Bank points to concern about the international scenario, with conflicts in the Middle East and the rise in the price of oil. It also cites the recent rise in the dollar and inflation expectations and highlights the uncertainties about public accounts. The monetary authority says it will continue to monitor how fiscal policy impacts the economy. Economist Marcos Lisboa, partner at Gibraltar Consulting, says that the government needs to face the escalation of public debt:

"Public debt grew by 10 points of GDP, which is a very worrying number. And the Central Bank does what it has to do to keep inflation under control. We have a record number of judicial recoveries of companies. We have retail companies in difficulty, companies in the financial system in difficulty. Agribusiness has large companies with many problems. If the government does not make decisions quickly, the crisis could be huge."