Banks see 13.25% interest this year

18 de julho de 2016

Financial institutions polled by the Brazilian Central Bank believe policymakers will keep the interest rate at 14.25% at this week’s meeting, but slash the benchmark rate to 13.25% before the year ends.

Brasília – Financial institutions polled by the Brazilian Central Bank expect the benchmark interest rate (known as the Selic rate) to be kept at 14.25% per annum at this week’s two-day Monetary Policy Committee (Copom) meeting, on Tuesday (19) and Wednesday (20). But the Selic rate is seen dropping to 13.25% before the end of this year. In 2017, additional cuts are expected, with the rate seen as ending the year at 11% per annum.

The estimates are from the Focus Bulletin issued this Monday (18) by the Central Bank. Poll respondents’ Gross Domestic Product (GDP) contraction forecast for this year changed from 3.30% to 3.25%. Next year, the GDP growth estimate moved from 1% to 1.1%. The US dollar price forecast changed from BRL 3.40 to BRL 3.39 at the end of 2016 and from BRL 3.55 to BRL 3.50 at the end of 2017.

*Translated by Gabriel Pomerancblum