Brazil widens the gap and continues with the highest real interest rate in the world after Copom maintains Selic; see ranking

Brazil widened the gap to second place and continues to have the highest real interest rate in the world after the Monetary Policy Committee (Copom) of the Central Bank (BC) maintained the Selic at 13.75% per year this Wednesday (4).

🔎 Real interest is formed, among other points, by the nominal interest rate subtracted from the inflation forecast for the next 12 months. Thus, according to a survey compiled by MoneYou, the indicator in the country was 9.49%.

Turkey moved into second place, with real interest rates of 7.77%. Argentina came in third, with 6.80%. The two countries displaced Russia, which fell from second to fourth place, with 6.57%.

📊 In the previous decision, in September, Russia occupied second position, and the difference to Brazil was 1.66 percentage points. Now, with Turkey in second, the gap has increased to 1.72 percentage points.

In a report released this Wednesday, MoneYou stated that the rise in inflation expectations for the next 12 months reduced real interest rates in most countries, amid the uncertainties caused by the conflict in the Middle East.

In Brazil, the institution also highlighted doubts about the trajectory of interest rates after the elections, amid discussions about fiscal policy, the devaluation of the real and pressure on the interest curve.

See below the main results from the list of 40 countries.

The survey also shows that, among 164 countries:

85.98% kept interest rates unchanged;

9.15% raised rates;

and 4.88% promoted cuts.

In the group of 40 countries that make up the ranking:

85% maintained interest;

10% raised rates;

and 5% made cuts.

Selic Maintenance

This Wednesday, the Copom maintained the basic interest rate at 13.75% per year, interrupting a sequence of five consecutive cuts.

The decision takes place in a scenario of greater uncertainty. After the re-election of Luiz Inácio Lula da Silva (PT), the market raised projections for inflation, the dollar and interest rates, while the American currency soared and the stock exchange registered a sharp drop.

Concern about public accounts also gained strength given the markets' reaction to the electoral result.

Abroad, the escalation of tensions in the Middle East and the rise in oil prices increase pressure on inflation, with a possible impact on fuels in Brazil.

Nominal interest

Considering nominal interest rates (without discounting projected inflation), the Brazilian rate maintained fourth position, behind Russia.

See below:

Türkiye: 36%

Argentina: 29%

Russia: 14%

Brazil: 13.75%

Colombia: 12.25%

South Africa: 7.25%

Mexico: 6.50%

Indonesia: 5.75%

Hungary: 5.50%

India: 5.50%

Philippines: 5.50%

Australia: 4.85%

Chile: 4.50%

Hong Kong: 4.25%

United States: 4%

Poland: 3.75%

United Kingdom: 3.75%

Czech Republic: 3.75%

Israel: 3.25%

China: 3%

South Korea: 3%

Malaysia: 2.75%

New Zealand: 2.75%

Germany: 2.65%

Austria: 2.65%

Spain: 2.65%

Greece: 2.65%

Netherlands: 2.65%

Portugal: 2.65%

Belgium: 2.65%

France: 2.65%

Italy: 2.65%

Canada: 2.50%

Denmark: 2.10%

Taiwan: 2%

Sweden: 1.75%

Singapore: 1.42%

Japan: 1.25%

Thailand: 1%

Switzerland: 0%