HomeBRAZILCENTRAL BANK CUTS INTEREST RATE AND GIVES POSITIVE SIGN FOR THE GOVERNMENT

CENTRAL BANK CUTS INTEREST RATE AND GIVES POSITIVE SIGN FOR THE GOVERNMENT

On Wednesday (02/08), the Central Bank Monetary Policy Committee (Copom) announced the first interest rate cut since August 2020. The committee reduced the country’s basic interest rate (Selic) by 0.5 percentage points — from 13.75% to 13.25% per year. The BC collegiate anticipated that it foresees a new cut of 0.5 percentage points in the next meeting, in September, and of the same intensity in the following meetings. The news may represent a new phase of improving relations between the government and the monetary authority. Since President Lula took office, he has criticized the Central Bank, particularly its president – who was appointed during his political rival’s mandate – for maintaining Selic quite high, which was hampering the government’s plan for economic development.

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