The interest rate forecast was kept at 11.75% for this year and 9.25% at the end of next year
Brasilia – This year’s inflation expectations are falling again Focused bulletinFrom Central bankpublished this Monday, 20. The screening for the IPCA in 2023 it went from 4.59% to 4.55%. A month earlier, the median was 4.65%. For 2024, the main target of monetary policy, the projection ranged from 3.92% to 3.91%. A month ago it was 3.87%.
For 2025, which also has weight in the decisions of the Monetary Policy Committee (Copom), the projection remained at 3.5% for the 17th consecutive week, which highlights the only partial re-anchoring highlighted by the BC after maintaining the 3% inflation target for the next few years. Over the longer horizon, 2026, the estimate remained at 3.5% for the twentieth consecutive week.
The inflation objectives pursued by the CB are 3.25% in 2023 and 3% in 2024, 2025 and 2026, with a margin of tolerance of 1.5 percentage points, more or less.
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The market maintained the expected median Selic to 9.25% by the end of 2024. A month ago the estimate was 9%. At the beginning of November, Copom reduced the economy’s basic interest rates by 0.5 points for the third consecutive time, bringing them to 12.25% per year.
The Selic rate estimate at the end of 2023 was held at 11.75% per year for the 15th consecutive week. The wait follows the COPOM signal according to which the rate cut of 0.5 percentage points continues to be the most appropriate for the next meetings. The collegium will meet only once this year, in December.
At the November meeting, Copom reiterated that the overall extent of the easing cycle over time will depend on the evolution of the inflationary dynamic, in particular on the components most sensitive to monetary policy and economic activity, on inflation expectations, in particular long-term ones, from its projections of inflation, output gap and balance of risks.
In the Focus Bulletin the projection for the Selic at the end of 2025 also remains at 8.75%. A month earlier it was 8.50%. For 2026, the projection remained at 8.50%, the same median as four weeks ago.
Source: Terra
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