Selic Rate Reduction Positively Affects Credit Market, According to CNI

Written by Corporativo

Published on 22/09/2023 at 11:10

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The National Confederation of Industry Welcomes the Copom Decision to Reduce the Basic Interest Rate, Envisioning a More Optimistic Scenario for Credit and the Economy.

The decision of the Monetary Policy Committee (Copom) of the Central Bank to cut the basic interest rate (Selic) by 0.50 percentage points was applauded by the National Confederation of Industry (CNI). According to the entity, the measure is timely and benefits the credit market and the economic activity as a whole.

A Breath of Fresh Air in the Credit Market

According to CNI President Robson Braga de Andrade, this reduction in the Selic comes at a critical moment. “The credit market for businesses saw a contraction of 5% in the first seven months of this year compared to the same period last year,” notes Andrade. He believes this measure will help reverse the decline in credit granting and provide a new boost to economic activity.

Economic Slowdown: A Concerning Backdrop

The Gross Domestic Product (GDP) also showed signs of slowing in the first two quarters of 2023, growing only 0.9% and 0.6%, respectively. Additionally, there was a notable decline in industrial production of capital goods and consumer goods in July 2023 compared to the same month last year. These statistics raise doubts about the future pace of economic activity. “The reduction in the Selic is crucial. It not only helps combat inflation, but also prevents greater restrictions on the industrial sector,” says the CNI president.

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The Reduction of the Selic and Inflation Under Control

Since February 2022, Brazilian monetary policy has been sufficiently strict to control inflation. Consumer price indices, which were a major concern in recent years, now show a downward trend. For example, the IPCA was at 5.77% at the beginning of the year and slowed to 4.16% in August.

Inflation Expectations and Real Interest Rates

The Focus report from the Central Bank also reveals an optimistic outlook for the coming years. The expected inflation for 2024 is 3.86% and for 2025 it is 3.50%. Even after the recent reduction in the Selic, the real interest rate remains at 8.8% per year, suggesting that there is still room for future Selic cuts without adversely affecting inflation or economic activity.

In summary, the reduction of the Selic is a correct move that should benefit both the credit market and economic activity in general. It is a positive step to mitigate the current challenges of the economy while maintaining a cautious balance with the inflation scenario.

Source: Journalism – CNI.

Selic Rate Reduction Positively Affects Credit Market, According to CNI

The National Confederation of Industry Welcomes the Copom Decision to Reduce the Basic Interest Rate, Envisioning a More Optimistic Scenario for Credit and the Economy.

A Breath of Fresh Air in the Credit Market

Economic Slowdown: A Concerning Backdrop

Major Oil, Gas, and Energy Event Will Take Place in Brazil: Macaé Energy Will Gather Petrobras, Equinor, Prio, Among Other Suppliers and Energy Executives for Business, Networking, and Employment Opportunities

The Reduction of the Selic and Inflation Under Control

Inflation Expectations and Real Interest Rates

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Selic Rate Reduction Positively Affects Credit Market, According to CNI

The National Confederation of Industry Welcomes the Copom Decision to Reduce the Basic Interest Rate, Envisioning a More Optimistic Scenario for Credit and the Economy.

A Breath of Fresh Air in the Credit Market

Economic Slowdown: A Concerning Backdrop

Major Oil, Gas, and Energy Event Will Take Place in Brazil: Macaé Energy Will Gather Petrobras, Equinor, Prio, Among Other Suppliers and Energy Executives for Business, Networking, and Employment Opportunities

The Reduction of the Selic and Inflation Under Control

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Where there was only sand and wind at 40 degrees, China built a megacity of 500,000 inhabitants with farms, wineries, and universities in the middle of the desert using melted glacier water from hundreds of kilometers away.

At over 8,800 meters above sea level, the summit of Mount Everest is made up of rocks that originated at the bottom of an ocean about 500 million years ago and were pushed to the highest point on Earth by the collision of tectonic plates.

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