The Monetary Policy Committee (Copom) of the Brazilian Central Bank (BC) decided yesterday to raise the annualized benchmark interest rate (Selic) from 19.50% to 19.75% per year.
The increase, decided unanimously, continues the upward trend that has been occurring monthly since September 2004.
The Selic is a benchmark for all the interest rates charged by the country’s financial institutions. It corresponds to the interest rate the government agrees to pay when it borrows money on the internal market.
In calculating the Selic, the Copom takes into account various factors, including the prospects for future inflation (in the next 30 days) and momentary upward or downward price movements in the economy (past inflation).