Copom arrives divided between cutting and maintaining the Selic at 13.75% after changes in risks
The decision comes out this Wednesday, 4th, with analysts divided and a balance of risks for inflation that has changed drastically since September.
BY THE X-TRADER NEWS NEWSROOM · REPORTING FROM ESTADÃO · 2 MIN
The Central Bank's Monetary Policy Committee (Copom) meets this Wednesday, 4th, with the Selic at 13.75% and a debate that, according to Estadão, was reduced to one question: cut or maintain? The newspaper describes the scenario as an excess of risks and uncertainties that pushes the collegiate into an impasse.
The last Copom meeting took place in September. Since then, according to the same vehicle, the balance of risks for inflation has changed drastically. The material consulted does not contain the numbers that measure this change, and therefore the size of the problem still depends on interpretation.
Analysts are divided between two alternatives. One party defends an additional cut of 0.25 percentage points in the Selic. Another considers it more appropriate to keep the rate at 13.75%. The division leaves the decision open until the announcement.
Estadão’s analysis goes beyond these options. According to the newspaper, the new risk scenario suggests that the BC would need to raise interest rates urgently, instead of cutting them. This reading is from the vehicle itself, not official data, but it helps to show the distance between the two sides of the debate.
What is at stake is the credibility of the conduct of monetary policy. Faced with a balance of risks that has changed, a cut tends to be read as a bet that inflation will ease, while maintenance signals caution. For the market, the question is which reading will prevail in the statement and in the projections that accompany the decision.
What changes for the investor
If the Copom maintains the Selic at 13.75%, the high interest rate tends to continue to weigh on the cost of credit and in the comparison between fixed income and variable income. A 0.25 percentage point cut would signal moderate relief, with limited effect on long rates. A reading that the increase is necessary, as Estadão's analysis suggests, tends to increase the sensitivity of future interest rates, exchange rates and the shares of companies dependent on credit. For those who invest and operate, the statement and projections released by the BC can weigh as much as the decision itself.
Automatically translated from Portuguese.
