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CNI Criticizes Maintenance of Interest Rates at 15% and Advocates Immediate Measures to Revert Adverse Scenario
The National Confederation of Industry (CNI) harshly criticized, on July 30, 2025, the decision of the Monetary Policy Committee (Copom) of the Central Bank.
The decision was to maintain the basic interest rate at 15% per year. For the entity, the excessively contractionary monetary policy undermines growth.
In addition, it increases the costs of the productive sector. This happens especially in a scenario already pressured by external and internal factors.
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According to Ricardo Alban, president of CNI, it is urgent to start reducing the Selic. Maintaining the current level discourages investments and makes credit more expensive.
As a result, the risk of an even greater economic contraction intensifies.
Increase in IOF and US Tariffs Creates Domino Effect
In addition to high Selic, the productive sector faces an increase in IOF on credit and exchange. This will add R$ 4.9 billion in annual costs to the industry.
This amount is estimated by CNI. As if that were not enough, tariffs imposed by the United States on Brazilian exports may lead to a significant drop in industrial production.
This impact generates large-scale layoffs. The combination of these factors exacerbates the economic environment.
According to Alban, an immediate change in posture from Copom is necessary. The country needs a monetary policy more favorable to growth.
It is essential to stimulate domestic production and consumption.
Brazil Tops the Real Interest Rate Ranking
According to the Central Bank, the real interest rate ended 2024 at 7% per year. However, in July 2025, it reached 10.1% per year.
This level positions Brazil as the second country in the world with the highest real interest rate, behind only Turkey.
This figure is 5.1 percentage points above the neutral rate. This indicates a strong economic restriction policy.
According to Taylor’s Rule, the Selic should be close to 10.59% per year. This number is 4.41 points below the current value.
This difference demonstrates a mismatch between inflation control and stimulation of productive activity.
More Expensive Credit Slows Consumption and Halts Investments
With high interest rates, credit becomes increasingly inaccessible. According to the Central Bank, the average rate charged from companies rose from 20.6% per year.
This data refers to September 2024. By June 2025, the average reached 24.3% per year.
For consumers, the average rate jumped from 52.3% to 58.3% during the same period. This scenario makes investments in modernization, innovation, and expansion unfeasible.
It also limits the working capital of companies. On the consumption side, high interest rates restrict access to higher value goods.
These products heavily depend on financing.
Production and Retail Slow Down with Less Access to Credit
The second quarter of 2025 already shows signs of an economic slowdown. According to IBGE, industrial production fell by 1.2% in April and May.
This drop was recorded compared to the previous quarter. In the same period, retail sales fell by 1.6%.
This movement reinforces the weakening of consumption. Additionally, the IBC-Br fell by 0.74% in May compared to April.
This indicator anticipates GDP performance. This set of data shows a loss of economic traction, caused by credit limitations.
Inflation Deceleration Expands Room for Cuts
Despite inflationary fears, recent data shows a deceleration in prices. According to IBGE, the IPCA was 1.31% in February 2025.
In March, it was at 0.56%. In April, it reached 0.43%. In May, it dropped to 0.26%. In June, it fell even further: 0.24%.
Food prices rose only 0.02% in May. In June, they fell by 0.43%. The accumulated high over 12 months dropped from 7.87% to 6.23%.
Another highlight is industrial goods. They increased by only 0.05% in May and June. The accumulated dropped from 4.09% to 3.72% between April and June.
This movement is due to the appreciation of the real. The Brazilian currency appreciated by 11.9% against the dollar in the first half of 2025.
Expectations Have Been Declining for Nine Weeks
In addition to current inflation, projections also show relief. Therefore, according to the Focus Report from the Central Bank, the IPCA for 2025 dropped to 5.1%.
Despite this, the decrease came after nine consecutive weeks of downward revisions. Thus, this movement reinforces the need to reduce the Selic.
As a result, the scenario allows for the beginning of a rate-cutting trajectory. Still, inflation control remains assured.
Industry Urges Urgent Action from the Central Bank
In the face of restricted credit and, at the same time, controlled inflation, therefore, the National Confederation of Industry reinforces the call for changes in monetary policy.
The Selic at 15% still hinders economic recovery and, consequently, threatens jobs. Moreover, it compromises investments and, thus, reduces the competitiveness of the national industry.
Ricardo Alban advocates that the Central Bank immediately initiates a cycle of cuts. Otherwise, the country may, therefore, plunge into prolonged recession, which would have severe impacts.
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