Market revises down projection for interest rate

Financial institutions estimate that Selic will slid from 6% to 5% by the end of the year.

Agência Brasil

Brasília – The financial market continues to revise down its projection for the Brazilian base interest rate know as Selic for the end of the year. As per this Monday (12) Focus Readout, a survey released every week by the Central Bank (BC), the forecast is that the Selic finishes 2019 at 5% per annum. Last week, the expectation had decreased from 5.5% per annum to 5.25% per annum.

The revision of expectations occurred after the Central Bank’s Monetary Policy Committee (Copom) reduced Selic by 0.5 percentage point to 6% per annum on July 31. By the end of 2020, the forecast remains at 5.5% per annum. There was also no change at the expectation for the end of 2021 and 2022: 7% per annum.

The forecast for the Gross Domestic Product (GDP) growth was changed from 0.82% to 0.81% this year. The survey points out that there was no change in the estimates for the next year: 2.1% in 2020, and 2.5% in 2021 and 2022.

This Monday, BC reported that the economic activity was down for the second straight quarter.

Estimated inflation, measured by the Extended National Consumer Price Index (IPCA) slid from 3.80% to 3.76%. Estimates for the next years were unchanged: 3.90% in 2020, 3.75% in 2021, 3.5% in 2022.

Translated by Guilherme Miranda

Wilson Dias/Agência Brasil

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