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Founders of MRV and Banco Inter Denounce the “Perverse Cycle” Caused by High Interest Rates in Brazil. According to Him, the Current Monetary Policy Suffocates Credit, Increases Default and Threatens Economic Sustainability. Menin Calls for a Union Between Government and Economic Agents to Stabilize the Market and Avoid Irreversible Damage.
The Brazilian economy may be heading for a dead end, where high interest rates threaten both market stability and people’s pockets.
This is the warning from Rubens Menin, founder of MRV, Banco Inter, and CNN Brasil, in an interview with Folha de S.Paulo.
Menin outlined a scenario of worrying instability caused by the rise in the Selic rate, which could reach 15% by the end of 2025.
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In the second paragraph of his analysis, Menin made it clear that the problem goes beyond the cold numbers of monetary policy.
The rise in interest rates directly affects access to credit, reducing investment and consumption capacity, which harms fundamental sectors such as real estate.
According to the businessman, we are living in a cycle where “the [market] keeps bleeding, bleeding, until a point of no return.”
Impacts on the Real Estate Sector
The real estate sector, where MRV stands out as one of the largest companies in the market, is one of the most affected by the increase in the Selic rate.
Despite the efforts of programs like Minha Casa, Minha Vida and SBPE (Brazilian Savings and Loan System) to mitigate the effects of high rates, the scarcity of resources has made it difficult to offer credit to different income brackets.
Menin highlighted that, although these mechanisms have some control, they are not sufficient to sustain the sector’s growth.
“High interest rates are a true trap for the economy”, said Menin. “They compromise people’s income and weaken not only the real estate market but also other essential sectors.”
Criticism of Government Communication
Another point highlighted by Menin is the lack of clarity in the federal government’s communication, especially regarding fiscal responsibility.
Confusing and contradictory statements have generated insecurity in the market, aggravating the volatility of future interest rates and feeding a negative cycle.
In his words, “We are losing the communication war, and when that happens, the market goes on alert.
Future interest rates rise, and the Central Bank intensifies its control measures. The result is a perverse cycle that harms the entire economy.”
Menin advocates that the government and private sector must work together on a common agenda to stabilize expectations and ensure a more predictable business environment.
Reflections on the Banking Sector
The impacts are not limited to the real estate sector. In the banking sector, the rise in interest rates has also caused significant damage.
Increased default, greater credit restrictions, and a decline in loan granting capacity are some of the problems being faced.
At Banco Inter, where Menin operates as one of the founders, the strategy has been to tighten the criteria for risk analysis, which ends up harming primarily the most vulnerable layers of the population.
Menin reinforces that “the restriction of credit is detrimental both to individuals and to businesses, as it hinders the raising of resources in times of crisis.”
Need for Alignment
For Menin, the current scenario requires a coordinated and collective effort. While he recognizes the importance of the independence of the Central Bank, he also emphasizes that fiscal and monetary policies need to be better aligned.
“We are living in an extremely delicate moment, where skepticism regarding the Brazilian economy is becoming more evident”, he said.
This lack of harmony between economic spheres makes the business environment less predictable and deters investment, further hindering the country’s growth.
For the businessman, it is essential that dialogue between economic agents strengthens to prevent an escalation of the crisis.
Is the Solution Possible?
The economic future of Brazil depends on coordinated actions between the government, private sector, and society.
Menin believes that, with the correct alignment of economic policies and clear communication, it is possible to reverse the perverse cycle of high interest rates.
But the question remains: Is Brazil ready to face this change and seek sustainable solutions?
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