• Categories
  • Archives

Brazil’s Interest Rate Hike Pleases No One

Brazil’s  Monetary Policy Committee (Copom) has announced late yesterday another increase in the Brazilian interest rate (Selic) from 18.25% to 18.75%. This is the sixth consecutive increase since September 2004.

The decision was taken unanimously by the committee,  “giving continuity to the process of adjustment of the basic interest rate begun in the September 2004 meeting,” according to the note issued by Copom. Since September, the Selic rate has accumulated an increase of 2.75 points. 
 
Rio de Janeiro’s Industries Federation (Firjan) criticized the measure and said that Brazil should expect a reduction in the rhythm of growth of the economy due to the increase.  
 
For Firjan, this new boost in interest rates is ill advised in a moment in which there is more credit available and longer term financing can be more easily obtained.


Firjan believes that the Copom should have waited to see how previous increases adopted by the Committee would affect inflation.


The president of the Trade Federation of the State of Rio de Janeiro (Fecomércio/RJ), Orlando Diniz, also condemned the monetary authorities’ action.  


Diniz commented that there is no truth to the allegations that there is a threat of pressure brought in by demand. According to him what happened to the Brazilian economy in 2004 was merely a catching up after losses from the past.


The President of Fecomércio/RJ believes that the recovery process of some economy sectors, in particular the non-durable goods sector, “might suffer heavily due to the new interest rates increase. According to him, micro and small businesses will suffer the most.


The Center of Industries of the State of São Paulo (Ciesp), considered the Copom decision a “continuity of an austerity policy, that dampens productive investment and job creation.”


In  a note issued to the press, the director of Ciesp’s Economy Department, Boris Tabacof, said that economic indexes point to a deceleration of business activity and stressed that “the same policy that punishes the industry is ineffective for the control of monitored prices, which answer for 30% of the inflation.” 
 
ABr

Tags:

  • Show Comments (1)

  • Guest

    How is it that as soon as the brazilian economy strats to move forward the Government always steps in and tries to stop this progress under the pretext of stopping inflation.How is it that stopping growth is good for a country? If high interest rates are so good how is that the US Japan and all of Europe have the lowest interset rates in history.Brazil will always remain a banana republic as long as it has such incompetent leaders running the country

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Ads

You May Also Like

Brazil Has Made Twitter into a Tool for a Fairer Democracy

While Twitter has revolutionized communication in the US and around the world, it has ...

Sugar cane cutting is extremely hard and badly paid work

Brazil’s Competitive Edge Comes from Workers’ Brutal Exploitation

Brazilian Foreign Minister Celso Amorim, the president of the G-20 (the group of 21 ...

Brazil’s Bank Workers Union Goes on National Strike

Latin American stocks sank deep into the red, as investors continued to take profits, ...

The US Is on the Expansion Plans of Brazil’s Nobel Bookstore

Livraria Nobel, which calls itself the largest chain of bookshops in Brazil, plans to ...

Brazilian Congress Wants Access to Corruption-Linked Adman’s Account in the US

Senator DelcÀ­dio Amaral, from the Workers Party of Mato Grosso do Sul state, president ...

French Musician Emmanuel Joremi Gressez

French Musician Murdered in Brazil While on Tour with His Band

The same day three Brazilian men accused of knifing to death three French nationals ...

RAPIDINHAS

It is so rare to see Portuguese-language poems translated into English and published in ...

RAPIDINHAS

At this stage, while campaigning is unofficial, the media should be exposing the inefficiency ...

Brazilians Take to the Streets Against Iran President’s Visit

About 1,500 people took part this Sunday afternoon, November 15, in São Paulo, southeastern ...

Russia’s 50% Discount Allowed Brazil to Send Its First Astronaut into Space

On March 22, Brazil will, for the first time, send an astronaut, lieutenant-coronel Marco ...