The Monetary Policy Committee (Copom) of the Central Bank of Brazil begins this Tuesday (17) the meeting that will define the new basic interest rate for the Brazilian economy, the Selic Rate, in a scenario of uncertainty in the international market. Tensions involving the United States, Israel and Iran have increased global volatility and put pressure on expectations for the monetary decision.
At the last meeting, held in January, the Copom decided to maintain the Selic rate at 15% per year, but signaled that the rate could start to fall from this meeting onwards, if economic conditions permitted. Since then, however, new factors have started to influence the scenario.
Among them is the strong rise in oil prices on the international market. The barrel has risen 42% since the start of the conflict in the Middle East, ending the last week above 100 dollars. Before tensions escalated, the price was around 72 dollars.
The appreciation of oil tends to put pressure on inflation, as it directly impacts fuel costs, especially diesel, and increases the price of freight and various products throughout the production chain in Brazil.
Another factor observed by the Central Bank is the recent behavior of inflation. The Broad National Consumer Price Index (IPCA) for February registered an increase of 0.7%, with emphasis on the increase in the education group, driven by the readjustment of school fees at the beginning of the year.
Given this scenario, the market is eagerly following the Copom decision, which will be announced this Wednesday, and may indicate the next steps for monetary policy in the country.
